Question 1

The larger the number of periods in the simple moving average forecasting method, the greater the method's responsiveness to changes in demand.

Accepted Answer

A) True 
 B)False

Question 2

Which time-series model below assumes that demand in the next period will be equal to the most recent period's demand?

Accepted Answer

A)  naive approach 
B)  moving average approach 
C)  weighted moving average approach 
D)  exponential smoothing approach 
E)  trend projection 
A)  naive approach 
B)  moving average approach 
C)  weighted moving average approach 
D)  exponential smoothing approach 
E)  trend projection

Question 3

Identify the seven steps involved in forecasting.

Accepted Answer

1. Determine the use of the forecast.
2.

Question 4

The last four weekly values of sales were 80, 100, 105, and 90 units, respectively. The last four forecasts (for the same four weeks) were 60, 80, 95, and 75 units, respectively. Calculate the MAD, MSE, and MAPE for these four weeks.

Accepted Answer

MAD = 65/4 = 16.25;

Question 5

Suppose that the last four months of sales were 8, 10, 15, and 9 units, respectively. Suppose further that the last four forecasts were 5, 6, 11, and 12 units, respectively. What is the Mean Absolute Deviation (MAD) of these forecasts?

Accepted Answer

A)  2 
B)  -10 
C)  3.5 
D)  9 
E)  10.5 
A)  2 
B)  -10 
C)  3.5 
D)  9 
E)  10.5

Question 6

Identify four quantitative forecasting methods.

Accepted Answer

The list includes naive, movin

Question 7

The three major types of forecasts used by organizations in planning future operations are:

Accepted Answer

A)  strategic, tactical, and operational. 
B)  economic, technological, and demand. 
C)  exponential smoothing, Delphi, and regression. 
D)  causal, time-series, and seasonal. 
E)  departmental, organizational, and territorial. 
A)  strategic, tactical, and operational. 
B)  economic, technological, and demand. 
C)  exponential smoothing, Delphi, and regression. 
D)  causal, time-series, and seasonal. 
E)  departmental, organizational, and territorial.

Question 8

Which of the following is TRUE regarding the two smoothing constants of the Forecast Including Trend (FIT) model?

Accepted Answer

A)  One constant is positive, while the other is negative. 
B)  They are called MAD and cumulative error. 
C)  Alpha is always smaller than beta. 
D)  One constant smooths the regression intercept, whereas the other smooths the regression slope. 
E)  Their values are determined independently. 
A)  One constant is positive, while the other is negative. 
B)  They are called MAD and cumulative error. 
C)  Alpha is always smaller than beta. 
D)  One constant smooths the regression intercept, whereas the other smooths the regression slope. 
E)  Their values are determined independently.

Question 9

The tracking signal is the:

Accepted Answer

A)  standard error of the estimate. 
B)  absolute deviation of the last period's forecast. 
C)  MAD. 
D)  ratio of cumulative error / MAD. 
E)  MAPE. 
A)  standard error of the estimate. 
B)  absolute deviation of the last period's forecast. 
C)  MAD. 
D)  ratio of cumulative error / MAD. 
E)  MAPE.

Question 10

Demand forecasts serve as inputs to financial, marketing, and personnel planning.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast?

Accepted Answer

A)  0 
B)  1 divided by the number of periods 
C)  0.5 
D)  1.0 
E)  cannot be determined 
A)  0 
B)  1 divided by the number of periods 
C)  0.5 
D)  1.0 
E)  cannot be determined

Question 12

Explain, in your own words, the meaning of the coefficient of determination.

Accepted Answer

The coefficient of determinati

Question 13

The ________ measures the strength of the relationship between two variables.

Accepted Answer

coefficien

Question 14

An innovative restaurateur owns and operates a dozen "Ultimate Low-Carb" restaurants in northern Arkansas. His signature item is a cheese-encrusted beef medallion wrapped in lettuce. Sales (x, in millions of dollars) are related to Profits (y-hat, in hundreds of thousands of dollars) by the regression equation y-hat = 7.21 + 1.76 x. What is your forecast of profit for a store with sales of $10 million? $30 million?

Accepted Answer

Students must recognize that "sales" is

Question 15

When one constant is used to smooth the forecast average and a second constant is used to smooth the trend, the forecasting method is ________.

Accepted Answer

exponential smoothing with tre

Question 16

In a regression equation where y-hat is demand and x is advertising, a coefficient of determination (R2) of .70 means that 70% of the variance in advertising is explained by demand.

Accepted Answer

A) True 
 B)False

Question 17

Arnold Tofu owns and operates a chain of 12 vegetable protein "hamburger" restaurants in northern Louisiana. Sales figures and advertising expenses for the stores are provided in the table below. Sales are given in millions of dollars; advertising expenses are in tens of thousands of dollars. Calculate a regression line for the data. What is your forecast of sales for a store with advertising spending of $240,000? $300,000?

Accepted Answer

Students must recognize that "advertisin

Question 18

________ forecasts use a series of past data points to make a forecast.

Accepted Answer

The answer of ________ forecasts use a series of past...

Question 19

The two general approaches to forecasting are:

Accepted Answer

A)  qualitative and quantitative. 
B)  mathematical and statistical. 
C)  judgmental and qualitative. 
D)  historical and associative. 
E)  judgmental and associative. 
A)  qualitative and quantitative. 
B)  mathematical and statistical. 
C)  judgmental and qualitative. 
D)  historical and associative. 
E)  judgmental and associative.

Question 20

Give an example, other than a restaurant or other food-service firm, of an organization that experiences an hourly seasonal pattern. (That is, each hour of the day has a pattern that tends to repeat day after day.) Explain.

Accepted Answer

Answer will vary. Ho

Exam 4: Forecasting

The larger the number of periods in the simple moving average forecasting method, the greater the method's responsiveness to changes in demand.

Which time-series model below assumes that demand in the next period will be equal to the most recent period's demand?

Identify the seven steps involved in forecasting.

The last four weekly values of sales were 80, 100, 105, and 90 units, respectively. The last four forecasts (for the same four weeks) were 60, 80, 95, and 75 units, respectively. Calculate the MAD, MSE, and MAPE for these four weeks.

Suppose that the last four months of sales were 8, 10, 15, and 9 units, respectively. Suppose further that the last four forecasts were 5, 6, 11, and 12 units, respectively. What is the Mean Absolute Deviation (MAD) of these forecasts?

Identify four quantitative forecasting methods.

The three major types of forecasts used by organizations in planning future operations are:

Which of the following is TRUE regarding the two smoothing constants of the Forecast Including Trend (FIT) model?

The tracking signal is the:

Demand forecasts serve as inputs to financial, marketing, and personnel planning.

Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast?

Explain, in your own words, the meaning of the coefficient of determination.

The ________ measures the strength of the relationship between two variables.

When one constant is used to smooth the forecast average and a second constant is used to smooth the trend, the forecasting method is ________.

In a regression equation where y-hat is demand and x is advertising, a coefficient of determination (R2) of .70 means that 70% of the variance in advertising is explained by demand.

________ forecasts use a series of past data points to make a forecast.

The two general approaches to forecasting are:

Give an example, other than a restaurant or other food-service firm, of an organization that experiences an hourly seasonal pattern. (That is, each hour of the day has a pattern that tends to repeat day after day.) Explain.

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In a regression equation where y-hat is demand and x is advertising, a coefficient of determination (R²) of .70 means that 70% of the variance in advertising is explained by demand.