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Operations And Supply Chain Management
Found in: Page 485
Operations And Supply Chain Management

Operations And Supply Chain Management

Book edition 14th
Author(s) F. Robert Jacobs
Pages 800 pages
ISBN 9780078024023

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Short Answer

What would you suggest to improve the forecast described in question 10?

To improve the low or biased forecast must add a trend component.

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Step by Step Solution

Definition of Trend Analysis

Trend analysis helps in making a forecast of market trends, sales growth, levels of stock and interest rates, etc. Trend analysis uses a range of statistical tools, all of which are accessible to business owners.

Trend analysis allows you to predict what is going on to happen, supported by what's already happened. It enables businesses to create data-driven decisions with relevant future events.

Explanation

If the tracking signal for your forecast was consistently positive, then the forecasting technique applied, is considered biased and consistently low, so to boost the low or biased forecast must add a trend component, because trend analysis offers a measurable and verifiable method for businesses to project future outcomes.

It can be used for failure analysis and as an early warning indicator of impending problems and help in improving the low or biased forecast.

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