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In which situation is the A/F ratio most useful? Group of answer choices If demand is...

In which situation is the A/F ratio most useful? Group of answer choices

If demand is highly variable

If the data involved is exponentially distributed

If there is bias in the forecasting process

If the standard deviation is relatively small

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Answer #1

If the demand is highly variable

A/F ratio is the ratio of actual to forecasted value. This gives us an idea about how much does the actual value deviates from forecast. For example, for an A/F ratio of 0.6, we can conclude that the actual value is 60% of the forecasted value. This ratio is very helpful to be used when the demand is highly variable. It reduces the variability and uncertainty attached with the forecast.

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