Question

According to David Arnold, there are four possible approaches to forecasting by analogy, which does not include which of the following?

1) Data is available on a comparable product in the same country.
2) Data is available on the same product in a comparable country.
3) Data is available on the same product from a dependent distributor in a neighboring country.
4) Data is available about a comparable company in the same country.
5) Data is available on the same product in every country.

Answer 1

David Arnold's forecasting by analogy excludes the approach where data is available on the same product in every country. The correct methodologies are based on comparable situations and specific data sources.The correct answer is option 5.

Step-by-step explanation:

According to David Arnold, there are four possible approaches to forecasting by analogy which involve making predictions based on existing data from similar situations.

Out of the options provided, the approach that does not include is option 5: Data is available on the same product in every country. This option does not fit the principle since forecasting by analogy typically involves using data from specific comparable situations, not from all-encompassing availability across every country.

The correct approaches would involve comparing similar products in the same country, the same product in a comparable country, or data from a related but not identical source, such as a dependent distributor in a neighboring country. Applying these methods to a business scenario helps organizations in making profitable decisions, much like farmers use data to enhance their crop production.