Exam 3: Forecasting

Which of the following forecasting methods uses executive judgment as its primary component for forecasting?

company has calculated its running sum of forecast errors to be 500 and its mean absolute deviation is exactly 35.Which of the following is the company's tracking signal?

tracking signal (TS)can be calculated using the arithmetic sum of forecast deviations divided by the MAD.

If a firm produced a standard item with relatively stable demand,the smoothing constant alpha (reaction rate to differences)used in an exponential smoothing forecasting model would tend to be in which of the following ranges?

Exponential smoothing is always the best and most accurate of all forecasting models.

It is difficult to identify the trend in time series data.

Time series forecasting models make predictions about the future based on analysis of past data.

In general,which forecasting time frame best identifies seasonal effects?

Regression is a functional relationship between two or more correlated variables,where one variable is used to predict another.

Using the exponential smoothing model for forecasting,the smoothing constant alpha determines the level of smoothing and:

RSFE in forecasting stands for "reliable safety function error."

In time series data depicting demand which of the following is not considered a component of demand variation?

Exponential smoothing forecasts always lag behind the actual occurrence but can be corrected somewhat with a trend adjustment.

The weighted moving average forecasting model uses a weighting scheme to modify the effects of individual data points.This is its major advantage over the simple moving average model.

Random errors can be defined as those that cannot be explained by the forecast model being used.

In general,which forecasting time frame compensates most effectively for random variation and short term changes?

When forecast errors occur in a normally distributed pattern,the ratio of the mean absolute deviation to the standard deviation is 2 to 1,or 2 x MAD = 1 standard deviation.

In business forecasting,what is usually considered a short-term time period?

Which of the following is the portion of observations you would expect to see lying within a plus or minus 3 MAD range?

Simple exponential smoothing lags changes in demand.