Question 1

Market research is a quantitative method of forecasting.

Accepted Answer

A) True 
 B)False

Question 2

Trend lines are usually the last things considered when developing a forecast.

Accepted Answer

A) True 
 B)False

Question 3

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

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 4

A company wants to forecast demand using the simple moving average.If the company uses four prior yearly sales values , which of the following is the simple moving average forecast for year 20142017?

Accepted Answer

A) 100.5 
B) 140.0 
C) 142.5 
D) 145.5 
E) 155.0 
A) 100.5 
B) 140.0 
C) 142.5 
D) 145.5 
E) 155.0

Question 5

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 6

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

Accepted Answer

A) True 
 B)False

Question 7

Which of the following forecasting methodologies is considered a causal forecasting technique?

Accepted Answer

A) Exponential smoothing 
B) Weighted moving average 
C) Linear regression 
D) Historical analogy 
E) Market research 
A) Exponential smoothing 
B) Weighted moving average 
C) Linear regression 
D) Historical analogy 
E) Market research

Question 8

Given a prior forecast demand value of 230, a related actual demand value of 250, and a smoothing constant alpha of 0.1, what is the exponential smoothing forecast value for the following period?

Accepted Answer

A) 230 
B) 232 
C) 238 
D) 248 
E) 250 
A) 230 
B) 232 
C) 238 
D) 248 
E) 250

Question 9

Which of the following considerations is not a factor in deciding which forecasting model a firm should choose?

Accepted Answer

A) Time horizon to forecast 
B) Product 
C) Accuracy required 
D) Data availability 
E) Analyst availability 
A) Time horizon to forecast 
B) Product 
C) Accuracy required 
D) Data availability 
E) Analyst availability

Question 10

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 11

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 12

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 13

Simple exponential smoothing lags changes in demand.

Accepted Answer

A) True 
 B)False

Question 14

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 15

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 16

The standard error of the estimate of a linear regression is not useful for judging the fit between the data and the regression line when doing forecasts.

Accepted Answer

A) True 
 B)False

Question 17

Experience and trial and error are the simplest ways to choose weights for the weighted moving average forecasting model.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) Delphi method 
B) Exponential averaging 
C) Simple movement smoothing 
D) Weighted moving average 
E) Simulation 
A) Delphi method 
B) Exponential averaging 
C) Simple movement smoothing 
D) Weighted moving average 
E) Simulation

Question 19

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 20

A 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?

Accepted Answer

A) Cannot be calculated based on this information 
B) About 14.3 
C) More than 35 
D) Exactly 35 
E) About 0.07 
A) Cannot be calculated based on this information 
B) About 14.3 
C) More than 35 
D) Exactly 35 
E) About 0.07

Exam 18: Forecasting

Market research is a quantitative method of forecasting.

Trend lines are usually the last things considered when developing a forecast.

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

A company wants to forecast demand using the simple moving average.If the company uses four prior yearly sales values , which of the following is the simple moving average forecast for year 20142017?

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

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

Which of the following forecasting methodologies is considered a causal forecasting technique?

Given a prior forecast demand value of 230, a related actual demand value of 250, and a smoothing constant alpha of 0.1, what is the exponential smoothing forecast value for the following period?

Which of the following considerations is not a factor in deciding which forecasting model a firm should choose?

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?

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.

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

Simple exponential smoothing lags changes in demand.

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

The standard error of the estimate of a linear regression is not useful for judging the fit between the data and the regression line when doing forecasts.

Experience and trial and error are the simplest ways to choose weights for the weighted moving average forecasting model.

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

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

A 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?

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