An increase in forecast accuracy
A. decreases both the overstocked and understocked quantity and decreases a firm’s profits.
B. decreases both the overstocked and understocked quantity and increases a firm’s profits.
C. increases both the overstocked and understocked quantity and decreases a firm’s profits.
D. increases both the overstocked and understocked quantity and increases a firm’s profits.
Answer:B
An increase in forecast accuracy
A. decreases both the overstocked and understocked quantity and decreases a firm’s profits. B. decreases both the overstocked and understocked quantity and increases a firm’s profits. C. increases both the overstocked and understocked quantity and decreases a firm’s profits. D. increases both the overstocked and understocked quantity and increases a firm’s profits.