If an entrepreneur produces too much stock due to wrong estimation then which process can reduce this mistake in future?
Answer and explanation
Correct answer: Use demand forecasting and customer data
Excess stock suggests that expected demand was higher than actual demand or that production was not matched to sales evidence. Reviewing past sales, customer feedback, seasonal patterns, and current orders can improve demand forecasting. Better forecasts support more suitable production quantities. Producing still more, deleting complaints, or always doubling price does not correct the estimation process.
Frequently asked questions
What is the correct answer to this question?
Use demand forecasting and customer data
Why is this the correct answer?
Excess stock suggests that expected demand was higher than actual demand or that production was not matched to sales evidence. Reviewing past sales, customer feedback, seasonal patterns, and current orders can improve demand forecasting. Better forecasts support more suitable production quantities. Producing still more, deleting complaints, or always doubling price does not correct the estimation process.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: Business, Trade and Commerce. Topic: Business Risk.
