Question 1

Forecasting techniques generally assume:

Accepted Answer

A)  the absence of randomness. 
B)  continuity of some underlying causal system. 
C)  a linear relationship between time and demand. 
D)  accuracy that increases the farther out in time the forecast projects. 
E)  accuracy that is better when individual items, rather than groups of items, are being considered. 
A)  the absence of randomness. 
B)  continuity of some underlying causal system. 
C)  a linear relationship between time and demand. 
D)  accuracy that increases the farther out in time the forecast projects. 
E)  accuracy that is better when individual items, rather than groups of items, are being considered.

Question 2

Over the past five years, a firm's sales have averaged 250 units in the first quarter of each year, 100 units in the second quarter, 150 units in the third quarter, and 300 units in the fourth quarter. What are appropriate quarter relatives for this firm's sales? Hint: Only minimal computations are necessary.

Accepted Answer

The answer of Over the past five years, a firm's...

Question 3

The two most important factors in choosing a forecasting technique are:

Accepted Answer

A)  cost and time horizon. 
B)  accuracy and time horizon. 
C)  cost and accuracy. 
D)  quantity and quality. 
E)  objective and subjective components. 
A)  cost and time horizon. 
B)  accuracy and time horizon. 
C)  cost and accuracy. 
D)  quantity and quality. 
E)  objective and subjective components.

Question 4

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 is this year's forecast using exponential smoothing with alpha = .25, if last year's smoothed forecast was 45?

Accepted Answer

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

Question 5

Seasonal relatives can be used to deseasonalize data or incorporate seasonality in a forecast.

Accepted Answer

A) True 
 B)False

Question 6

The Delphi approach involves the use of a series of questionnaires to achieve a consensus forecast.

Accepted Answer

A) True 
 B)False

Question 7

Forecasts based on judgment and opinion do not include:

Accepted Answer

A)  executive opinion. 
B)  salesperson opinion. 
C)  second opinions. 
D)  customer surveys. 
E)  Delphi methods. 
A)  executive opinion. 
B)  salesperson opinion. 
C)  second opinions. 
D)  customer surveys. 
E)  Delphi methods.

Question 8

Gradual, long-term movement in time series data is called:

Accepted Answer

A)  seasonal variation. 
B)  cycles. 
C)  irregular variation. 
D)  trend. 
E)  random variation. 
A)  seasonal variation. 
B)  cycles. 
C)  irregular variation. 
D)  trend. 
E)  random variation.

Question 9

Given an actual demand of 59, a previous forecast of 64, and an alpha of .3, what would the forecast for the next period be using simple exponential smoothing?

Accepted Answer

A)  36.9 
B)  57.5 
C)  60.5 
D)  62.5 
E)  65.5 
A)  36.9 
B)  57.5 
C)  60.5 
D)  62.5 
E)  65.5

Question 10

For new products in a strong growth mode, a low alpha will minimize forecast errors when using exponential smoothing techniques.

Accepted Answer

A) True 
 B)False

Question 11

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 trend-adjusted (double) smoothing with alpha = .3 and beta = .2, if the forecast for last year was 310, the forecast for two years ago was 430, and the trend estimate for last year's forecast was -150?

Accepted Answer

A)  162.4 
B)  180.3 
C)  301.4 
D)  403.2 
E)  510.0 
A)  162.4 
B)  180.3 
C)  301.4 
D)  403.2 
E)  510.0

Question 12

The dean of a school of business is forecasting total student enrollment for this year's summer session classes based on the following historical data: $$\begin{array} { l l } 
\text { Year } & \text { Enrollment } \
\hline \text { Four years ago } & 2000 \
\text { Three years ago } & 2200 \
\text { Two years ago } & 2800 \
\text { Last year } & 3000
\end{array}$$ What is this year's forecast using the least squares trend line for these data?

Accepted Answer

A)  3,600 
B)  3,500 
C)  3,400 
D)  3,300 
E)  3,200 
A)  3,600 
B)  3,500 
C)  3,400 
D)  3,300 
E)  3,200

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 are this and next year's forecasts using the least squares trend line for these data?

Accepted Answer

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

Question 14

Trend-adjusted exponential smoothing uses double smoothing to add twice the forecast error to last period's actual demand.

Accepted Answer

A) True 
 B)False

Question 15

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 exponential smoothing with alpha = .2, if last year's smoothed forecast was 15,000?

Accepted Answer

A)  20,000 
B)  19,000 
C)  17,500 
D)  16,000 
E)  15,000 
A)  20,000 
B)  19,000 
C)  17,500 
D)  16,000 
E)  15,000

Question 16

The sample standard deviation of forecast error is equal to the square root of MSE.

Accepted Answer

A) True 
 B)False

Question 17

One reason for using the Delphi method in forecasting is to:

Accepted Answer

A)  avoid premature consensus (bandwagon effect). 
B)  achieve a high degree of accuracy. 
C)  maintain accountability and responsibility. 
D)  be able to replicate results. 
E)  prevent hurt feelings. 
A)  avoid premature consensus (bandwagon effect). 
B)  achieve a high degree of accuracy. 
C)  maintain accountability and responsibility. 
D)  be able to replicate results. 
E)  prevent hurt feelings.

Question 18

The best forecast is not necessarily the most accurate.

Accepted Answer

A) True 
 B)False

Question 19

The naive approach to forecasting requires a linear trend line.

Accepted Answer

A) True 
 B)False

Question 20

A manager uses this equation to predict demand: Yt = 20 + 4t. Over the past eight periods, demand has been as follows. Are the results acceptable? Explain. $$\begin{array} { l l l l l l l l l } 
\text { Period } ( \mathrm { t } ) & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 \
\hline  \text { Demand } & 25 & 28 & 31 & 34 & 36 & 43 & 50 & 54
\end{array}$$

Accepted Answer

\[\begin{array} { l r r r r r r r r } 
\

Forecasting techniques generally assume:

The two most important factors in choosing a forecasting technique are:

Seasonal relatives can be used to deseasonalize data or incorporate seasonality in a forecast.

The Delphi approach involves the use of a series of questionnaires to achieve a consensus forecast.

Forecasts based on judgment and opinion do not include:

Gradual, long-term movement in time series data is called:

Given an actual demand of 59, a previous forecast of 64, and an alpha of .3, what would the forecast for the next period be using simple exponential smoothing?

For new products in a strong growth mode, a low alpha will minimize forecast errors when using exponential smoothing techniques.

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 are this and next year's forecasts using the least squares trend line for these data?

Trend-adjusted exponential smoothing uses double smoothing to add twice the forecast error to last period's actual demand.

The sample standard deviation of forecast error is equal to the square root of MSE.

One reason for using the Delphi method in forecasting is to:

The best forecast is not necessarily the most accurate.

The naive approach to forecasting requires a linear trend line.

A manager uses this equation to predict demand: Y_t = 20 + 4t. Over the past eight periods, demand has been as follows. Are the results acceptable? Explain. Period () 1 2 3 4 5 6 7 8 Demand 25 28 31 34 36 43 50 54

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

Exam 3: Forecasting

Forecasting techniques generally assume:

The two most important factors in choosing a forecasting technique are:

Seasonal relatives can be used to deseasonalize data or incorporate seasonality in a forecast.

The Delphi approach involves the use of a series of questionnaires to achieve a consensus forecast.

Forecasts based on judgment and opinion do not include:

Gradual, long-term movement in time series data is called:

Given an actual demand of 59, a previous forecast of 64, and an alpha of .3, what would the forecast for the next period be using simple exponential smoothing?

For new products in a strong growth mode, a low alpha will minimize forecast errors when using exponential smoothing techniques.

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 are this and next year's forecasts using the least squares trend line for these data?

Trend-adjusted exponential smoothing uses double smoothing to add twice the forecast error to last period's actual demand.

The sample standard deviation of forecast error is equal to the square root of MSE.

One reason for using the Delphi method in forecasting is to:

The best forecast is not necessarily the most accurate.

The naive approach to forecasting requires a linear trend line.

A manager uses this equation to predict demand: Yt = 20 + 4t. Over the past eight periods, demand has been as follows. Are the results acceptable? Explain. Period () 1 2 3 4 5 6 7 8 Demand 25 28 31 34 36 43 50 54

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

A manager uses this equation to predict demand: Y_t = 20 + 4t. Over the past eight periods, demand has been as follows. Are the results acceptable? Explain. Period () 1 2 3 4 5 6 7 8 Demand 25 28 31 34 36 43 50 54