Exam 8: Forecasting

Draw a curve that represents four out of the five demand patterns for time series as discussed in this chapter. Clearly label both dependent and independent axis and the salient features of your graph that demonstrate your chosen patterns. Select a product or service and discuss what influences might cause it to exhibit each of these patterns.

Which one of the following basic patterns of demand is difficult to predict because it is affected by national or international events or because of a lack of demand history reflecting the stages of demand from product development to decline?

The closer the value of the sample correlation coefficient is to -1.00, the worse the predictive ability of the independent variable for the dependent variable.

A linear regression model is developed that has a slope of -2.5 and an intercept of 10. The sample coefficient of determination is 0.50. Which of the following statements is True?

How is a typical forecasting process similar to the Plan-Do-Study-Act (PDSA) cycle? (See Chapter 5 for more information on PDSA)

Aggregation is the act of clustering several similar products or services.

Judgment methods of forecasting should never be used with quantitative forecasting methods.

Table 8.7 A sales manager wants to forecast monthly sales of the machines the company makes using the following monthly sales data. -Which statement about forecast accuracy is True?

One of the basic time series patterns is random.

Judgment methods of forecasting are quantitative methods that use historical data on independent variables to predict demand.

A regression equation with a coefficient of determination near one would be most likely to occur when the data demonstrated a:

Graph 8.1 Data plotted in the graph appear in the table below. -Refer to Graph 8.1. What is the average seasonal index for the Sundays in the data set?

Table 8.2 The Agricultural Extension Agent's Office has tracked fertilizer application and crop yields for a variety of chickpea and has recorded the data shown in the following table. Their staff statistician developed the regression model and computed the performance statistics displayed below the data. -Use the information in Table 8.2. If the correlation coefficient were negative, which of these statements would be True?

Market research is a systematic approach to determine consumer interest by gaining consensus from a group of experts while maintaining their anonymity.

When forecasting total demand for all their services or products, few companies err by more than:

Which one of the following is most useful for measuring the bias in a forecast?

Table 8.4 The Furniture Super Mart is a furniture retailer in Evansville, Indiana. The Marketing Manager wants to prepare a media budget based on the next quarter's business plan. The manager wants to decide the mix of radio advertising and newspaper advertising needed to generate varying levels of Weekly Gross Revenue. The manager has collected data for the past five weeks, and has recorded the following average Weekly Gross Revenues and expenditures for Weekly Radio (X1) and Newspaper (X2) advertising: The Manager uses the multiple regression model in OM Explorer and obtains the following results: -Use the information provided in Table 8.4. What is the estimated Weekly Gross Revenue if $7,000 is spent on Radio Advertising (X1) and $4,000 is spent on Newspaper Advertising (X2)?

________ methods use historical data on independent variables to predict demand.

A systematic increase or decrease in the mean of the series over time is a(n) ________.

Table 8.4 The Furniture Super Mart is a furniture retailer in Evansville, Indiana. The Marketing Manager wants to prepare a media budget based on the next quarter's business plan. The manager wants to decide the mix of radio advertising and newspaper advertising needed to generate varying levels of Weekly Gross Revenue. The manager has collected data for the past five weeks, and has recorded the following average Weekly Gross Revenues and expenditures for Weekly Radio (X1) and Newspaper (X2) advertising: The Manager uses the multiple regression model in OM Explorer and obtains the following results: -Use the information provided in Table 8.4. Adding $1,000 of Weekly Radio Advertising (X1) can be expected to increase Weekly Gross Revenues by what amount? (Assume all other variables are held constant.)