Question 1

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

Accepted Answer

A) Six weeks to one year 
B) Three months to two years 
C) One to five years 
D) One to six months 
E) Six months to six years 
A) Six weeks to one year 
B) Three months to two years 
C) One to five years 
D) One to six months 
E) Six months to six years B

Question 2

If you were selecting from a variety of forecasting models based on MAD, which of the following MAD values from the same data would reflect the most accurate model?

Accepted Answer

A) 0.2 
B) 0.8 
C) 1.0 
D) 10.0 
E) 100.0 
A) 0.2 
B) 0.8 
C) 1.0 
D) 10.0 
E) 100.0 A

Question 3

A company has had actual unit demand for four consecutive years of 100, 110, 125, and 150.The respective forecasts using exponential smoothing were 120 for each of those four years.What value of alpha, the smoothing constant, was the firm using? ____________________________________

Accepted Answer

0 (zero
Explanation: If the forecast deviates from the actual but the forecast for the next year does not change, then the value of alpha must be zero.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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?

Accepted Answer

A) 5 to 10 percent 
B) 20 to 50 percent 
C) 20 to 80 percent 
D) 60 to 120 percent 
E) 90 to 100 percent 
A) 5 to 10 percent 
B) 20 to 50 percent 
C) 20 to 80 percent 
D) 60 to 120 percent 
E) 90 to 100 percent

Question 6

In most cases, demand for products or services can be broken down into several components.Which of the following is not considered a component of demand?

Accepted Answer

A) Average demand for a period 
B) A trend 
C) Seasonal elements 
D) Past data 
E) Autocorrelation 
A) Average demand for a period 
B) A trend 
C) Seasonal elements 
D) Past data 
E) Autocorrelation

Question 7

A company wants to forecast demand using the weighted moving average.If the company uses three prior yearly sales values , and we want to weight year 2011 at 30 percent, year 2012 at 30 percent, and year 2013 at 40 percent, which of the following is the weighted moving average forecast for year 2014?

Accepted Answer

A) 170 
B) 168 
C) 158 
D) 152 
E) 146 
A) 170 
B) 168 
C) 158 
D) 152 
E) 146

Question 8

In exponential smoothing, it is desirable to use a higher smoothing constant when forecasting demand for a product experiencing high growth.

Accepted Answer

A) True 
 B)False

Question 9

In a forecasting model using simple exponential smoothing, the data pattern should remain stationary.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a possible source of bias error in forecasting?

Accepted Answer

A) Failing to include the right variables 
B) Using the wrong forecasting method 
C) Employing less sophisticated analysts than necessary 
D) Using incorrect data 
E) Using standard deviation rather than MAD 
A) Failing to include the right variables 
B) Using the wrong forecasting method 
C) Employing less sophisticated analysts than necessary 
D) Using incorrect data 
E) Using standard deviation rather than MAD

Question 11

Describe the collaborative planning, forecasting, and replenishment (CPFR) technique.

Accepted Answer

CPFR is described in the text.It is a sh

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

A company wants to generate a forecast for unit demand for year 2014 using exponential smoothing.The actual demand in year 2013 was 120.The forecast demand in year 2013 was 110.Using these data and a smoothing constant alpha of 0.1, which of the following is the resulting year 2014 forecast value?

Accepted Answer

A) 100 
B) 110 
C) 111 
D) 114 
E) 120 
A) 100 
B) 110 
C) 111 
D) 114 
E) 120

Question 14

Simple exponential smoothing lags changes in demand.

Accepted Answer

A) True 
 B)False

Question 15

In most cases, demand for products or services can be broken into several components.Which of the following is considered a component of demand?

Accepted Answer

A) Cyclical elements 
B) Future demand 
C) Past demand 
D) Inconsistent demand 
E) Level demand 
A) Cyclical elements 
B) Future demand 
C) Past demand 
D) Inconsistent demand 
E) Level demand

Question 16

Bayesian analysis is the simplest way to choose weights for the weighted moving average forecasting model.

Accepted Answer

A) True 
 B)False

Question 17

What does the text mean when it states that rather than to search for the perfect forecast one should learn to live with inaccurate forecasts?

Accepted Answer

The text makes this statement: "perfect

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Which of the following forecasting methods can be used for short-term forecasting?

Accepted Answer

A) Simple exponential smoothing 
B) Delphi technique 
C) Market research 
D) Hoskins-Hamilton smoothing 
E) Serial regression 
A) Simple exponential smoothing 
B) Delphi technique 
C) Market research 
D) Hoskins-Hamilton smoothing 
E) Serial regression

Question 20

You are using an exponential smoothing model for forecasting.The running sum of the forecast error statistics (RSFE) are calculated each time a forecast is generated.You find the last RSFE to be 34.Originally, the forecasting model used was selected because of its relatively low MAD of 0.4.To determine when it is time to re-evaluate the usefulness of the exponential smoothing model, you compute tracking signals.Which of the following is the resulting tracking signal?

Accepted Answer

A) 85 
B) 60 
C) 13.6 
D) 12.9 
E) 8 
A) 85 
B) 60 
C) 13.6 
D) 12.9 
E) 8

Exam 18: Forecasting

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

If you were selecting from a variety of forecasting models based on MAD, which of the following MAD values from the same data would reflect the most accurate model?

A company has had actual unit demand for four consecutive years of 100, 110, 125, and 150.The respective forecasts using exponential smoothing were 120 for each of those four years.What value of alpha, the smoothing constant, was the firm using? ____________________________________

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

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?

In most cases, demand for products or services can be broken down into several components.Which of the following is not considered a component of demand?

In exponential smoothing, it is desirable to use a higher smoothing constant when forecasting demand for a product experiencing high growth.

In a forecasting model using simple exponential smoothing, the data pattern should remain stationary.

Which of the following is a possible source of bias error in forecasting?

Describe the collaborative planning, forecasting, and replenishment (CPFR) technique.

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

A company wants to generate a forecast for unit demand for year 2014 using exponential smoothing.The actual demand in year 2013 was 120.The forecast demand in year 2013 was 110.Using these data and a smoothing constant alpha of 0.1, which of the following is the resulting year 2014 forecast value?

Simple exponential smoothing lags changes in demand.

In most cases, demand for products or services can be broken into several components.Which of the following is considered a component of demand?

Bayesian analysis is the simplest way to choose weights for the weighted moving average forecasting model.

What does the text mean when it states that rather than to search for the perfect forecast one should learn to live with inaccurate forecasts?

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

Which of the following forecasting methods can be used for short-term forecasting?

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