Question 1

Random errors in forecasting occur when an undetected secular trend is not included in a forecasting model.

Accepted Answer

A) True 
 B)False

Question 2

The equation for exponential smoothing states that the new forecast is equal to the old forecast plus the error of the old forecast.

Accepted Answer

A) True 
 B)False

Question 3

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) Forecast error 
B) Autocorrelation 
C) Previous demand 
D) Consistent demand 
E) Repeat demand 
A) Forecast error 
B) Autocorrelation 
C) Previous demand 
D) Consistent demand 
E) Repeat demand

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Which of the following forecasting methodologies is considered a time series forecasting technique?

Accepted Answer

A) Simple moving average 
B) Market research 
C) Leading indicators 
D) Historical analogy 
E) Simulation 
A) Simple moving average 
B) Market research 
C) Leading indicators 
D) Historical analogy 
E) Simulation

Question 6

There are no differences in strategic and tactical forecasting.A forecast is a mathematical projection, and its ultimate purpose should make no difference to the analyst.

Accepted Answer

A) True 
 B)False

Question 7

In forecasting, RSFE stands for "running sum of forecast errors."

Accepted Answer

A) True 
 B)False

Question 8

A company hires you to develop a linear regression forecasting model.Based on the company's historical sales information, you determine the intercept value of the model to be 1,200.You also find the slope value is minus 50.If, after developing the model, you are given a value of X = 10, which of the following is the resulting forecast value using this model?

Accepted Answer

A) -1,800 
B) 700 
C) 1,230 
D) 1,150 
E) 12,000 
A) -1,800 
B) 700 
C) 1,230 
D) 1,150 
E) 12,000

Question 9

Cyclical influences on demand are often expressed graphically as a linear function that is either upward or downward sloping.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is the percentage of observations you would expect to see lying within a plus or minus 2 MAD range?

Accepted Answer

A) 57.04 percent 
B) 89.04 percent 
C) 98.33 percent 
D) 99.86 percent 
E) 100.00 percent 
A) 57.04 percent 
B) 89.04 percent 
C) 98.33 percent 
D) 99.86 percent 
E) 100.00 percent

Question 11

A company has calculated its running sum of forecast errors to be 1,000, and its tracking signal is 50.What is the company's mean absolute deviation? _________________________________

Accepted Answer

20
Explanation: Trac

Question 12

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

Accepted Answer

A) 57.05 percent 
B) 88.95 percent 
C) 98.36 percent 
D) 99.85 percent 
E) 100 percent 
A) 57.05 percent 
B) 88.95 percent 
C) 98.36 percent 
D) 99.85 percent 
E) 100 percent

Question 13

A company wants to forecast demand using the simple moving average.If the company uses three prior yearly sales values , which of the following is the simple moving average forecast for year 2014?

Accepted Answer

A) 100.5 
B) 122.5 
C) 133.3 
D) 135.6 
E) 139.3 
A) 100.5 
B) 122.5 
C) 133.3 
D) 135.6 
E) 139.3

Question 14

A company has actual unit demand for three consecutive years of 124, 126, and 135.The respective forecasts for the same three years are 120, 120, and 130.Which of the following is the resulting MAD value that can be computed from these data?

Accepted Answer

A) 1 
B) 3 
C) 5 
D) 15 
E) 123 
A) 1 
B) 3 
C) 5 
D) 15 
E) 123

Question 15

A company wants to forecast demand using the weighted moving average.If the company uses two prior yearly sales values , and we want to weight year 2012 at 10 percent and year 2013 at 90 percent, which of the following is the weighted moving average forecast for year 2014?

Accepted Answer

A) 120 
B) 128 
C) 133 
D) 138 
E) 142 
A) 120 
B) 128 
C) 133 
D) 138 
E) 142

Question 16

Because the factors governing demand for products are very complex, all forecasts of demand contain error.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is used to describe the degree of error?

Accepted Answer

A) Weighted moving average 
B) Regression 
C) Moving average 
D) Forecast as a percent of actual 
E) Mean absolute deviation 
A) Weighted moving average 
B) Regression 
C) Moving average 
D) Forecast as a percent of actual 
E) Mean absolute deviation

Question 18

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

Accepted Answer

A) Short-term forecasts 
B) Quick-time forecasts 
C) Long-range forecasts 
D) Medium-term forecasts 
E) Rapid-change forecasts 
A) Short-term forecasts 
B) Quick-time forecasts 
C) Long-range forecasts 
D) Medium-term forecasts 
E) Rapid-change forecasts

Question 19

A good forecaster is one who develops special skills and experience at one forecasting technique and is capable of applying it to widely diverse situations.

Accepted Answer

A) True 
 B)False

Question 20

Name the four basic types of forecasting.(1) ______________________________
(2) ______________________________
(3) ______________________________
(4) ______________________________

Accepted Answer

(1 qualitative.(2 time series analysis.(

Exam 18: Forecasting

Random errors in forecasting occur when an undetected secular trend is not included in a forecasting model.

The equation for exponential smoothing states that the new forecast is equal to the old forecast plus the error of the old forecast.

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

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

Which of the following forecasting methodologies is considered a time series forecasting technique?

There are no differences in strategic and tactical forecasting.A forecast is a mathematical projection, and its ultimate purpose should make no difference to the analyst.

In forecasting, RSFE stands for "running sum of forecast errors."

Cyclical influences on demand are often expressed graphically as a linear function that is either upward or downward sloping.

Which of the following is the percentage of observations you would expect to see lying within a plus or minus 2 MAD range?

A company has calculated its running sum of forecast errors to be 1,000, and its tracking signal is 50.What is the company's mean absolute deviation? _________________________________

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

A company wants to forecast demand using the simple moving average.If the company uses three prior yearly sales values , which of the following is the simple moving average forecast for year 2014?

A company has actual unit demand for three consecutive years of 124, 126, and 135.The respective forecasts for the same three years are 120, 120, and 130.Which of the following is the resulting MAD value that can be computed from these data?

A company wants to forecast demand using the weighted moving average.If the company uses two prior yearly sales values , and we want to weight year 2012 at 10 percent and year 2013 at 90 percent, which of the following is the weighted moving average forecast for year 2014?

Because the factors governing demand for products are very complex, all forecasts of demand contain error.

Which of the following is used to describe the degree of error?

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

A good forecaster is one who develops special skills and experience at one forecasting technique and is capable of applying it to widely diverse situations.

Name the four basic types of forecasting.(1) ______________________________ (2) ______________________________ (3) ______________________________ (4) ______________________________

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