Question

In order to manage forecast accuracy, companies must:

I. Measure forecast error
II. Monitor forecast error
III. Make forecast adjustments based forecast error

Answer 1

In order to manage forecast accuracy, companies must measure forecast error, monitor forecast error, and make forecast adjustments based on forecast error.

Step-by-step explanation:

In order to manage forecast accuracy, companies must:

1. Measure forecast error: Companies need to track the accuracy of their forecasts by comparing them to the actual outcomes. This involves calculating the difference between the forecasted value and the actual value.
2. Monitor forecast error: Companies should regularly review and analyze their forecast errors to identify any patterns or trends. This helps them understand the sources of error and make necessary adjustments.
3. Make forecast adjustments based on forecast error: Companies should use the insights gained from monitoring forecast errors to make adjustments to their forecasts. This could involve revising assumptions, updating models, or incorporating additional data.