Question 1

A forecast based on the previous forecast plus a percentage of the forecast error is:

Accepted Answer

A)  a naive forecast.
B)  a simple moving average forecast.
C)  a centered moving average forecast.
D)  an exponentially smoothed forecast.
E)  an associative forecast.F) None of the above
G) B) and E)

Question 2

The more novel a new product or service design is, the more forecasters have to rely on

Accepted Answer

A)  subjective estimates.
B)  seasonality.
C)  cyclicality.
D)  historical data.
E)  smoothed variation.F) B) and C)
G) B) and E)

Question 3

Moving average forecasting techniques do the following:

Accepted Answer

A)  Immediately reflect changing patterns in the data.
B)  Lead changes in the data.
C)  Smooth variations in the data.
D)  Operate independently of recent data.
E)  Assist when organizations are relocating.F) All of the above
G) A) and C)

Question 4

The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data:

What is the monthly rate of change (slope) of the least squares trend line for these data?

Accepted Answer

A)  320
B)  102
C)  8
D)  −0.4
E)  −8F) B) and E)
G) C) and D)

Question 5

Given an actual demand of 59, a previous forecast of 64, and an alpha of 0.3, what would the forecast for the next period be using simple exponential smoothing?

Accepted Answer

A)  36.9
B)  57.5
C)  60.5
D)  62.5
E)  65.5F) None of the above
G) B) and C)

Question 6

The mean absolute deviation is used to:

Accepted Answer

A)  estimate the trend line.
B)  eliminate forecast errors.
C)  measure forecast accuracy.
D)  seasonally adjust the forecast.
E)  compute periodic forecast errors.F) A) and E)
G) B) and E)

Question 7

Given the following historical data and weights of 0.5, 0.3, and 0.2, what is the three-period moving average forecast for period 5?

Accepted Answer

A)  144.20
B)  144.80
C)  144.67
D)  143.00
E)  144.00F) A) and D)
G) A) and B)

Question 8

The use of a control chart assumes that random errors are normally distributed about a mean of zero.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following mechanisms for enhancing profitability is most likely to result from improving short-term forecast performance?

Accepted Answer

A)  increased inventory
B)  reduced flexibility
C)  higher-quality products
D)  greater customer satisfaction
E)  greater seasonalityF) A) and B)
G) D) and E)

Question 10

The naive forecast is limited in its application to series that reflect no trend or seasonality.

Accepted Answer

A) True 
 B)False

Question 11

A manager uses the following equation to predict monthly receipts: Y t = 40,000 + 150t. What is the forecast for July if t = 0 in April of this year?

Accepted Answer

A)  40,450
B)  40,600
C)  42,100
D)  42,250
E)  42,400F) None of the above
G) A) and B)

Question 12

Detecting nonrandomness in errors can be done using:

Accepted Answer

A)  MSEs.
B)  MAPs.
C)  control charts.
D)  correlation coefficients.
E)  strategies.F) C) and D)
G) C) and E)

Question 13

A concert promoter is forecasting this year's attendance for one of his concerts based on the following historical data:

What is this year's forecast using the naive approach?

Accepted Answer

A)  22,000
B)  20,000
C)  18,000
D)  15,000
E)  12,000F) A) and B)
G) B) and D)

Question 14

Exponential smoothing adds a percentage (called alpha)of the last period's forecast to estimate the next period's demand.

Accepted Answer

A) True 
 B)False

Question 15

Bias is measured by the ratio of the cumulative sum of forecast errors to the mean absolute deviation (MAD).

Accepted Answer

A) True 
 B)False

Question 16

Forecasting techniques that are based on time-series data assume that future values of the series will duplicate past values.

Accepted Answer

A) True 
 B)False

Question 17

Accuracy in forecasting can be measured by:

Accepted Answer

A)  MSE.
B)  MRP.
C)  MPS.
D)  MTM.
E)  MTE.F) C) and E)
G) A) and B)

Question 18

Which of the following is not a type of judgmental forecasting?

Accepted Answer

A)  executive opinions
B)  sales force opinions
C)  consumer surveys
D)  the Delphi method
E)  time series analysisF) A) and B)
G) B) and D)

Question 19

The primary difference between seasonality and cycles is:

Accepted Answer

A)  the duration of the repeating patterns.
B)  the magnitude of the variation.
C)  the ability to attribute the pattern to a cause.
D)  the direction of the movement.
E)  there are only four seasons but 30 cycles.F) B) and D)
G) A) and B)

Question 20

A control chart involves setting action limits for cumulative forecast error.

Accepted Answer

A) True 
 B)False

Exam 3: Forecasting

Exponential smoothing adds a percentage (called alpha)of the last period's forecast to estimate the next period's demand.

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A control chart involves setting action limits for cumulative forecast error.

Correct AnswerverifiedShow Answer

Bias is measured by the ratio of the cumulative sum of forecast errors to the mean absolute deviation (MAD).

Correct AnswerverifiedShow Answer

Which of the following is not a type of judgmental forecasting?

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Moving average forecasting techniques do the following:

Correct AnswerverifiedShow Answer

A forecast based on the previous forecast plus a percentage of the forecast error is:

Correct AnswerverifiedShow Answer

The primary difference between seasonality and cycles is:

Correct AnswerverifiedShow Answer

The naive forecast is limited in its application to series that reflect no trend or seasonality.

Correct AnswerverifiedShow Answer

The use of a control chart assumes that random errors are normally distributed about a mean of zero.

Correct AnswerverifiedShow Answer

Given an actual demand of 59, a previous forecast of 64, and an alpha of 0.3, what would the forecast for the next period be using simple exponential smoothing?

Correct AnswerverifiedShow Answer

A manager uses the following equation to predict monthly receipts: Y t = 40,000 + 150t. What is the forecast for July if t = 0 in April of this year?

Correct AnswerverifiedShow Answer

Forecasting techniques that are based on time-series data assume that future values of the series will duplicate past values.

Correct AnswerverifiedShow Answer

The mean absolute deviation is used to:

Correct AnswerverifiedShow Answer

The more novel a new product or service design is, the more forecasters have to rely on

Correct AnswerverifiedShow Answer

Given the following historical data and weights of 0.5, 0.3, and 0.2, what is the three-period moving average forecast for period 5?

Correct AnswerverifiedShow Answer

A concert promoter is forecasting this year's attendance for one of his concerts based on the following historical data: What is this year's forecast using the naive approach?

Correct AnswerverifiedShow Answer

Detecting nonrandomness in errors can be done using:

Correct AnswerverifiedShow Answer

Accuracy in forecasting can be measured by:

Correct AnswerverifiedShow Answer

Which of the following mechanisms for enhancing profitability is most likely to result from improving short-term forecast performance?

Correct AnswerverifiedShow Answer

The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data: What is the monthly rate of change (slope) of the least squares trend line for these data?

Correct AnswerverifiedShow Answer

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A manager uses the following equation to predict monthly receipts: Y _t = 40,000 + 150t. What is the forecast for July if t = 0 in April of this year?

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