Transcript:
A: There are three types, aren’t there?
B: Yes. The qualitative – that’s sometimes called the judgemental forecast, the time series forecast and the causal forecast. I’ll tell you about each one in turn.
A: You took a lot of notes, didn’t you?
B: Yes. I always do. Anyway, let’s get started. Qualitative forecasting. Years ago businesses used to rely heavily on quantitative forecasting but recently that’s changed. These days companies make decisions based on forecasts that depend on somebody’s judgement or experience.
A: But they do use statistics too, don’t they?
B: Yes. Afterwards. To supplement the findings. The main problem with this type of forecasting is that managers don’t like to share their views when - their views are extreme.
Result:
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Option 1: "their views are extreme"
Explanation: This option is correct because the text states that the main problem with qualitative forecasting is that managers don’t like to share their views when 'their views are extreme.' This directly aligns with the context of the conversation, where the speaker discusses the reluctance of managers to express extreme opinions.
Option 2: "their views are clear"
Explanation: This option is incorrect because the text does not mention anything about managers' views being clear. In fact, it suggests the opposite, as it highlights the issue of managers being hesitant to share their views, particularly when they are extreme.
Option 3: "they are paid less"
Explanation: This option is incorrect as it introduces an unrelated concept about salary that is not discussed in the text. The conversation focuses on the sharing of views in forecasting, not on compensation.
Option 4: "their views are effective"
Explanation: This option is incorrect because the text does not support the idea that managers' views are effective. Instead, it emphasizes their reluctance to share views that are extreme, which implies a lack of confidence rather than effectiveness.
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