1. What is the difference between bias and random error in forecasting?
Random errors refer to short term and bias to long term
Random errors refer to long term and bias to short term
Random errors are smaller than bias errors
Bias errors are consistently in the same direction while random errors are not
2. Which of the following is NOT true about forecasting?
It is good practice to include a measure of expected forecast error with any forecast.
In exponential smoothing, a lower smoothing constant will better forecast demand for a product experiencing high growth.
It is good practice to use more than one forecasting model and then take a look at the results using common sense.
A benefit of qualitative forecasts is that they take advantage of expert opinion.