Question 1

Focus forecasting tries a variety of computer models and selects the best one for a particular application.

Accepted Answer

A) True 
 B)False

Question 2

Seasonal indices adjust raw data for patterns that repeat at regular time intervals.

Accepted Answer

A) True 
 B)False

Question 3

Cycles and random variations are both components of time series.

Accepted Answer

A) True 
 B)False

Question 4

The department manager using a combination of methods has forecast sales of toasters at a local department store. Calculate the MAD for the manager's forecast. Compare the manager's forecast against a naive forecast. Which is better?
 $\begin{array}{|l|l|l|}
\hline\text { Month } & \text { Unit Sales } &\text { Manager's }\&&\text { Forecast } \\hline \text { January } & 52 \
\hline \text { February } & 61 \
\hline \text { March } & 73 \
\hline \text { April } & 79 \
\hline \text { May } & 66 \
\hline \text { June } & 51 \\hline \text { July } & 47 & 50 \
\hline \text { August } & 44 & 55 \
\hline \text { September } & 30 & 52 \
\hline \text { October } & 55 & 42 \
\hline \text { November } & 74 & 60 \
\hline \text { December } & 125 & 75 \
\hline
\end{array}$

Accepted Answer

@#IMG-DLM& The manager's forecast has a

Question 5

Which of the following statements about time-series forecasting is true?

Accepted Answer

A)  It is based on the assumption that future demand will be the same as past demand. 
B)  It makes extensive use of the data collected in the qualitative approach. 
C)  It is based on the assumption that the analysis of past demand helps predict future demand. 
D)  Because it accounts for trends, cycles, and seasonal patterns, it is always more powerful than associative forecasting. 
E)  All of the above are true. 
A)  It is based on the assumption that future demand will be the same as past demand. 
B)  It makes extensive use of the data collected in the qualitative approach. 
C)  It is based on the assumption that the analysis of past demand helps predict future demand. 
D)  Because it accounts for trends, cycles, and seasonal patterns, it is always more powerful than associative forecasting. 
E)  All of the above are true.

Question 6

Identify four components of a time series. Which one of these is rarely forecast?
 Why is this so?

Accepted Answer

Trend, seasonality, cycles, an

Question 7

Describe three popular measures of forecast accuracy.

Accepted Answer

Measures of forecast accuracy include: (

Question 8

Identify the seven steps involved in forecasting.

Accepted Answer

1. Determine the use of the forecast.
2.

Question 9

A measure of forecast error that does not depend on the magnitude of the item being forecast is the __________.

Accepted Answer

mean absol

Question 10

Describe the three forecasting time horizons and their use.

Accepted Answer

Forecasting time horizons are: short ran

Question 11

A naive forecast for September sales of a product would be equal to the sales in August.

Accepted Answer

A) True 
 B)False

Question 12

Forecasts used for new product planning, capital expenditures, facility location or expansion, and R&D typically utilize a

Accepted Answer

A)  short-range time horizon 
B)  medium-range time horizon 
C)  long-range time horizon 
D)  naive method, because there is no data history 
E)  all of the above 
A)  short-range time horizon 
B)  medium-range time horizon 
C)  long-range time horizon 
D)  naive method, because there is no data history 
E)  all of the above

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Suppose that demand in period 1 was 7 units and the demand in period 2 was 9 units. Assume that the forecast for period 1 was for 5 units. If the firm uses exponential smoothing with an alpha value of .20, what should be the forecast for period 3? (Round answers to two decimal places.)

Accepted Answer

A)  9.00 
B)  3.72 
C)  9.48 
D)  5.00 
E)  6.12 
A)  9.00 
B)  3.72 
C)  9.48 
D)  5.00 
E)  6.12

Question 15

The sales force composite forecasting method relies on salespersons' estimates of expected sales.

Accepted Answer

A) True 
 B)False

Question 16

The quarterly "make meeting" of Lexus dealers is an example of a sales force composite forecast.

Accepted Answer

A) True 
 B)False

Question 17

Which is not a characteristic of exponential smoothing?

Accepted Answer

A)  smoothes random variations in the data 
B)  easily altered weighting scheme 
C)  weights each historical value equally 
D)  has minimal data storage requirements 
E)  None of the above; they are all characteristics of exponential smoothing. 
A)  smoothes random variations in the data 
B)  easily altered weighting scheme 
C)  weights each historical value equally 
D)  has minimal data storage requirements 
E)  None of the above; they are all characteristics of exponential smoothing.

Question 18

Given the following data, calculate the three-year moving averages for years 4 through 10.
 $$\begin{array} { | c | c | } 
\hline \text { Year } & \text { Demand } \
\hline 1 & 74 \
\hline 2 & 90 \
\hline 3 & 59 \
\hline 4 & 91 \
\hline 5 & 140 \
\hline 6 & 98 \
\hline 7 & 110 \
\hline 8 & 123 \
\hline 9 & 99 \
\hline
\end{array}$$

Accepted Answer

The answer of Given the following data, calculate the three-year...

Question 19

The fundamental difference between cycles and seasonality is the

Accepted Answer

A)  duration of the repeating patterns 
B)  magnitude of the variation 
C)  ability to attribute the pattern to a cause 
D)  all of the above 
E)  none of the above 
A)  duration of the repeating patterns 
B)  magnitude of the variation 
C)  ability to attribute the pattern to a cause 
D)  all of the above 
E)  none of the above

Question 20

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

Exam 4: Forecasting

Focus forecasting tries a variety of computer models and selects the best one for a particular application.

Seasonal indices adjust raw data for patterns that repeat at regular time intervals.

Cycles and random variations are both components of time series.

Which of the following statements about time-series forecasting is true?

Identify four components of a time series. Which one of these is rarely forecast? Why is this so?

Describe three popular measures of forecast accuracy.

Identify the seven steps involved in forecasting.

A measure of forecast error that does not depend on the magnitude of the item being forecast is the __________.

Describe the three forecasting time horizons and their use.

A naive forecast for September sales of a product would be equal to the sales in August.

Forecasts used for new product planning, capital expenditures, facility location or expansion, and R&D typically utilize a

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

Suppose that demand in period 1 was 7 units and the demand in period 2 was 9 units. Assume that the forecast for period 1 was for 5 units. If the firm uses exponential smoothing with an alpha value of .20, what should be the forecast for period 3? (Round answers to two decimal places.)

The sales force composite forecasting method relies on salespersons' estimates of expected sales.

The quarterly "make meeting" of Lexus dealers is an example of a sales force composite forecast.

Which is not a characteristic of exponential smoothing?

Given the following data, calculate the three-year moving averages for years 4 through 10. Year Demand 1 74 2 90 3 59 4 91 5 140 6 98 7 110 8 123 9 99

The fundamental difference between cycles and seasonality is the

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

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