Which of the following statements about time-series forecasting is TRUE?
A) It is always based on the assumption that future demand will be the same as past demand.
B) It makes extensive use of the data collected in the qualitative approach.
C) It is based on the assumption that the analysis of past demand helps predict future demand.
D) Because it accounts for trends, cycles, and seasonal patterns, it is always more powerful than associative forecasting.
E) All of these are true.

Question

Quizplus · Accepted Answer

Time-series forecasting is based on the assumption that past demand patterns can help predict future demand. It uses historical data to identify patterns and trends, and these patterns and trends are used to develop future demand forecasts. Time-series forecasting does not assume that future demand will be the same as past demand, and it does not rely on qualitative data to the same extent as other forecasting approaches. While time-series forecasting does account for trends, cycles, and seasonal patterns, it may not always be more powerful than associative forecasting, as the effectiveness of each approach depends on the specific situation and the accuracy of the data used.

Which of the Following Statements About Time-Series Forecasting Is TRUE