Question
Which of the following most requires long -range forecasting (as opposed to short -range or medium-range forecasting) for its planning purposes? A) job scheduling B) production levels C) cash budgeting D) capital expenditures E) purchasing
Answer
4.6
(294 Votes)
Fletcher
Master · Tutor for 5 years
Answer
D) Capital Expenditures
Explanation
## Step 1: Understand the question. The question is asking us to identify which of the given options most requires long-range forecasting for its planning purposes. Long-range forecasting typically refers to predictions made for a period of more than one year into the future.## Step 2: Analyze each option. A) Job scheduling typically requires short-range forecasting as it often involves planning for days or weeks ahead.B) Production levels can require short, medium, or long-range forecasting depending on the nature of the product and the industry. However, it is not the one that most requires long-range forecasting.C) Cash budgeting usually involves short to medium-range forecasting as it often deals with the cash flow of an organization in the near future.D) Capital expenditures, on the other hand, involve large investments in long-term assets such as property, plant, and equipment. These decisions require long-range forecasting because they have long-term implications for the organization's financial health and strategic direction.E) Purchasing usually involves short to medium-range forecasting as it often deals with the procurement of goods and services necessary for the organization's immediate operations.## Step 3: Based on the analysis, capital expenditures (option D) is the one that most requires long-range forecasting for its planning purposes.