Question 1

Forecasts help managers both to plan the system itself and to provide valuable information for using the system.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following is not a step in the forecasting process?

Accepted Answer

A)  Determine the purpose and level of detail required. 
B)  Eliminate all assumptions. 
C)  Establish a time horizon. 
D)  Select a forecasting model. 
E)  Monitor the forecast. 
A)  Determine the purpose and level of detail required. 
B)  Eliminate all assumptions. 
C)  Establish a time horizon. 
D)  Select a forecasting model. 
E)  Monitor the forecast. B

Question 3

Data on the last three years of demand are available as follows: $$\begin{array} { l l l l l } 
&&& { \text { Season } } \
\text { Year } & \text { Spring } & \text { Summer } & \text { Fall } & \text { Winter } \
\hline  \text { Three years ago } & 18 & 10 & 26 & 42 \
\text { Two years ago } & 26 & 18 & 34 & 50 \
\text { Last year } & 34 & 26 & 42 & 58
\end{array}$$ What is this year's seasonally adjusted forecast for each season?

Accepted Answer

Spring = 40.93; Summer = 29.81; Fall = 51.14; Winter = 74.37

Question 4

Which of the following would be an advantage of using a sales force composite to develop a demand forecast?

Accepted Answer

A)  The sales staff is least affected by changing customer needs. 
B)  The sales force can easily distinguish between customer desires and probable actions. 
C)  The sales staff is often aware of customers' future plans. 
D)  Salespeople are least likely to be influenced by recent events. 
E)  Salespeople are least likely to be biased by sales quotas. 
A)  The sales staff is least affected by changing customer needs. 
B)  The sales force can easily distinguish between customer desires and probable actions. 
C)  The sales staff is often aware of customers' future plans. 
D)  Salespeople are least likely to be influenced by recent events. 
E)  Salespeople are least likely to be biased by sales quotas.

Question 5

Putting forecast errors into perspective is best done using

Accepted Answer

A)  exponential smoothing. 
B)  MAPE. 
C)  linear decision rules. 
D)  MAD. 
E)  hindsight. 
A)  exponential smoothing. 
B)  MAPE. 
C)  linear decision rules. 
D)  MAD. 
E)  hindsight.

Question 6

A control chart involves setting action limits for cumulative forecast error.

Accepted Answer

A) True 
 B)False

Question 7

Given an actual demand of 105, a forecasted value of 97, and an alpha of .4, the simple exponential smoothing forecast for the next period would be:

Accepted Answer

A)  80.8. 
B)  93.8. 
C)  100.2. 
D)  101.8. 
E)  108.2. 
A)  80.8. 
B)  93.8. 
C)  100.2. 
D)  101.8. 
E)  108.2.

Question 8

The business analyst for Video Sales, Inc. wants to forecast this year's demand for DVD decoders based on the following historical data: $$\begin{array} { l l } 
\text { Year } & \text { Demand } \
\hline \text { 5 years ago } & 900 \
\text { 4 years ago } & 700 \
\text { 3 years ago } & 600 \
\text { 2 years ago } & 500 \
\text { Last year } & 300
\end{array}$$ What is the forecast for this year using the naive approach?

Accepted Answer

A)  163 
B)  180 
C)  300 
D)  420 
E)  510 
A)  163 
B)  180 
C)  300 
D)  420 
E)  510

Question 9

Which is not a characteristic of exponential smoothing?

Accepted Answer

A)  smoothes random variations in the data 
B)  weights each historical value equally 
C)  has an easily altered weighting scheme 
D)  has minimal data storage requirements 
E)  smoothes real variations in the data 
A)  smoothes random variations in the data 
B)  weights each historical value equally 
C)  has an easily altered weighting scheme 
D)  has minimal data storage requirements 
E)  smoothes real variations in the data

Question 10

Which technique is used in computing seasonal relatives?

Accepted Answer

A)  double smoothing 
B)  Delphi 
C)  mean squared error 
D)  centered moving average 
E)  exponential smoothing 
A)  double smoothing 
B)  Delphi 
C)  mean squared error 
D)  centered moving average 
E)  exponential smoothing

Question 11

A concert promoter is forecasting this year's attendance for one of his concerts based on the following historical data: $$\begin{array} { l l } 
\text { Year } & \text { Attendance } \
\hline \text { Four years ago } & 10,000 \
\text { Three years ago } & 12,000 \
\text { Two years ago } & 18,000 \
\text { Last Year } & 20,000
\end{array}$$ What is this year's forecast using the least squares trend line for these data?

Accepted Answer

A)  20,000 
B)  21,000 
C)  22,000 
D)  23,000 
E)  24,000 
A)  20,000 
B)  21,000 
C)  22,000 
D)  23,000 
E)  24,000

Question 12

Which of the following would tend to decrease forecast accuracy?

Accepted Answer

A)  a reduction in demand variability 
B)  a shortening of the forecast time horizon 
C)  an attempt to forecast demand for a group of similar items rather than an individual item 
D)  a change in the underlying causal system 
A)  a reduction in demand variability 
B)  a shortening of the forecast time horizon 
C)  an attempt to forecast demand for a group of similar items rather than an individual item 
D)  a change in the underlying causal system

Question 13

Data on demand over the last few years are available as follows: $$\begin{array} { l l } 
\text { Time Period } & \text { Demand } \
\hline 7 \text { years ago } & 7 \
6 \text { years ago } & 28 \
\text { 5 years ago } & 21 \
\text { 4 years ago } & 42 \
\text { 3 years ago } & 35 \
\text { 2 years ago } & 56 \
\text { Last year } & 49
\end{array}$$ What would this year's forecast be if we were using the naive approach?

Accepted Answer

The answer of Data on demand over the last few...

Question 14

Removing the seasonal component from a data series (deseasonalizing) can be accomplished by dividing each data point by its appropriate seasonal relative.

Accepted Answer

A) True 
 B)False

Question 15

Given forecast errors of 5, 0, -4, and 3, what is the bias?

Accepted Answer

A)  -4 
B)  4 
C)  5 
D)  12 
E)  6 
A)  -4 
B)  4 
C)  5 
D)  12 
E)  6

Question 16

Given forecast errors of 5, 0, -4, and 3, what is the mean absolute deviation?

Accepted Answer

A)  4 
B)  3 
C)  2.5 
D)  2 
E)  1 
A)  4 
B)  3 
C)  2.5 
D)  2 
E)  1

Question 17

Which of the following helps improve supply chain forecasting performance?

Accepted Answer

A)  contracts that require supply chain members to formulate long-term forecasts 
B)  penalties for supply chain members that adjust forecasts 
C)  sharing forecasts or demand data across the supply chain 
D)  increasing lead times for critical supply chain members 
E)  increasing the number of suppliers at critical junctures in the supply chain 
A)  contracts that require supply chain members to formulate long-term forecasts 
B)  penalties for supply chain members that adjust forecasts 
C)  sharing forecasts or demand data across the supply chain 
D)  increasing lead times for critical supply chain members 
E)  increasing the number of suppliers at critical junctures in the supply chain

Question 18

The president of State University wants to forecast student enrollments for this academic year based on the following historical data: $$\begin{array} { l l } 
\text { Year } & \text { Enrollments } \
\hline \text { 5 years ago } & 15,000 \
4 \text { years ago } & 16,000 \
\text { 3 years ago } & 18,000 \
2 \text { years ago } & 20,000 \
\text { Last year } & 21,000
\end{array}$$ What is the forecast for this year using the least squares trend line for these data?

Accepted Answer

A)  18,750 
B)  19,500 
C)  21,000 
D)  22,650 
E)  22,800 
A)  18,750 
B)  19,500 
C)  21,000 
D)  22,650 
E)  22,800

Question 19

The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data: $$\begin{array} { l l } 
\text { Month } & \text { Number of Visits } \
\hline  \text { April } & 100 \
\text { May } & 140 \
\text { June } & 110 \
\text { July } & 150 \
\text { August } & 120 \
\text { September } & 160
\end{array}$$ What is the monthly rate of change (slope) of the least squares trend line for these data?

Accepted Answer

A)  320 
B)  102 
C)  8 
D)  -.4 
E)  -8 
A)  320 
B)  102 
C)  8 
D)  -.4 
E)  -8

Question 20

The purpose of the forecast should be established first so that the level of detail, amount of resources, and accuracy level can be understood.

Accepted Answer

A) True 
 B)False

Exam 3: Forecasting

Forecasts help managers both to plan the system itself and to provide valuable information for using the system.

Which of the following is not a step in the forecasting process?

Data on the last three years of demand are available as follows: Season Year Spring Summer Fall Winter Three years ago 18 10 26 42 Two years ago 26 18 34 50 Last year 34 26 42 58 What is this year's seasonally adjusted forecast for each season?

Which of the following would be an advantage of using a sales force composite to develop a demand forecast?

Putting forecast errors into perspective is best done using

A control chart involves setting action limits for cumulative forecast error.

Given an actual demand of 105, a forecasted value of 97, and an alpha of .4, the simple exponential smoothing forecast for the next period would be:

The business analyst for Video Sales, Inc. wants to forecast this year's demand for DVD decoders based on the following historical data: Year Demand 5 years ago 900 4 years ago 700 3 years ago 600 2 years ago 500 Last year 300 What is the forecast for this year using the naive approach?

Which is not a characteristic of exponential smoothing?

Which technique is used in computing seasonal relatives?

A concert promoter is forecasting this year's attendance for one of his concerts based on the following historical data: Year Attendance Four years ago 10,000 Three years ago 12,000 Two years ago 18,000 Last Year 20,000 What is this year's forecast using the least squares trend line for these data?

Which of the following would tend to decrease forecast accuracy?

Data on demand over the last few years are available as follows: Time Period Demand 7 years ago 7 6 years ago 28 5 years ago 21 4 years ago 42 3 years ago 35 2 years ago 56 Last year 49 What would this year's forecast be if we were using the naive approach?

Removing the seasonal component from a data series (deseasonalizing) can be accomplished by dividing each data point by its appropriate seasonal relative.

Given forecast errors of 5, 0, -4, and 3, what is the bias?

Given forecast errors of 5, 0, -4, and 3, what is the mean absolute deviation?

Which of the following helps improve supply chain forecasting performance?

The purpose of the forecast should be established first so that the level of detail, amount of resources, and accuracy level can be understood.

Introduction to Operations Management

Competitiveness, Strategy, and Productivity

Product and Service Design

Extension: Reliability

Strategic Capacity Planning for Products and Services

Extension: Decision Theory

Process Selection and Facility Layout

Work Design and Measurement

Extension: Learning Curves

Location Planning and Analysis

Extension: The Transportation Model

Management of Quality

Quality Control

Extension: Acceptance Sampling

Aggregate Planning and Master Scheduling

MRP and ERP

Inventory Management

Jit and Lean Operations

Extension: Maintenance

Supply Chain Management

Scheduling

Project Management

Management of Waiting Lines

Linear Programming

Filters