Asked by Cassandra Myers on Jul 17, 2024
Verified
Long-term forecasts are usually less accurate than short-term forecasts because
A) short-term forecasts have a larger standard deviation of error relative to the mean than long-term forecasts.
B) short-term forecasts have more standard deviation of error relative to the mean than long-term forecasts.
C) long-term forecasts have a smaller standard deviation of error relative to the mean than short-term forecasts.
D) long-term forecasts have a larger standard deviation of error relative to the mean than short-term forecasts.
Long-Term Forecasts
Predictions about future events or trends in an industry or organization that extend beyond the immediate future, typically several years ahead.
Standard Deviation
An indicator of the extent of differences or spread among a collection of numbers.
- Comprehend the effects of long-term versus short-term forecasting accuracy and the variances in their error standard deviations.
Verified Answer
AM
Adrienne MichelleJul 19, 2024
Final Answer :
D
Explanation :
Long-term forecasts are subject to more uncertainty because there are more variables that can affect the forecast outcome over a longer period of time. This results in a larger standard deviation of error relative to the mean than short-term forecasts, making them less accurate. Short-term forecasts have less time for unforeseen events to affect the outcome and therefore have a smaller standard deviation of error.
Learning Objectives
- Comprehend the effects of long-term versus short-term forecasting accuracy and the variances in their error standard deviations.
Related questions
Mean Squared Error and Coefficient of Correlation Are Two Measures ...
When Brianna Calculates Her Forecasts, She Uses a Type of ...
The Mean Absolute Deviation Is the Summation of the Residuals ...
The Most Commonly Used Measures of Forecast Accuracy Are The ...
The Mean Absolute Deviation Averages the Absolute Differences Between the ...