Question 1

Time-series techniques involve the identification of explanatory variables that can be used to predict future demand.

Accepted Answer

A) True 
 B)False

Question 2

Use linear regression to develop a predictive model for demand for burial vaults based on sales of caskets. $$\begin{array} { l l l } 
\text { Year } & \text { Sales of Caskets } ( 000 ) & \text { Demand for Vaults } ( 000 ) \
\hline 1 & 8 & 5 \
2 & 7 & 2 \
3 & 10 & 6 \
4 & 6 & 4
\end{array}$$

Accepted Answer

None

Question 3

Given forecast errors of 4, 8, and -3, what is the mean absolute deviation?

Accepted Answer

A)  4 
B)  3 
C)  5 
D)  6 
E)  12 
A)  4 
B)  3 
C)  5 
D)  6 
E)  12

Question 4

A moving average forecast tends to be more responsive to changes in the data series when more data points are included in the average.

Accepted Answer

A) True 
 B)False

Question 5

A manager is using the equation below to forecast quarterly demand for a product:
Yt = 6,000 + 80t where t = 0 at Q2 of last year
Quarter relatives are Q1 = .6, Q2 = .9, Q3 = 1.3, and Q4 = 1.2.
What forecasts are appropriate for the last quarter of this year and the first quarter of next year?

Accepted Answer

For Q4 of this year t = 6
For Q1 of next

Question 6

Suppose a three-period weighted average is being used to forecast demand. Weights for the periods are as follows: wt-3 = 0.2, wt-2 = 0.3 and wt-1 = 0.5. Demand observed in the previous three periods was as follows: At-3 = 2,200, At-2 = 1,950, At-1 = 2,050. What will be the demand forecast for period t?

Accepted Answer

A)  2,000 
B)  2,095 
C)  1,980 
D)  2,050 
E)  1,875 
A)  2,000 
B)  2,095 
C)  1,980 
D)  2,050 
E)  1,875

Question 7

Given the following historical data, what is the simple three-period moving average forecast for period 6? $$\begin{array} { l l } 
\text { Period } & \text { Value } \
\hline 1 & 73 \
2 & 68 \
3 & 65 \
4 & 72 \
5 & 67
\end{array}$$

Accepted Answer

A)  67 
B)  115 
C)  69 
D)  68 
E)  68.67 
A)  67 
B)  115 
C)  69 
D)  68 
E)  68.67

Question 8

An advantage of a weighted moving average is that recent actual results can be given more importance than what occurred a while ago.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following mechanisms for enhancing profitability is most likely to result from improving short-term forecast performance?

Accepted Answer

A)  increased inventory 
B)  reduced flexibility 
C)  higher-quality products 
D)  greater customer satisfaction 
E)  greater seasonality 
A)  increased inventory 
B)  reduced flexibility 
C)  higher-quality products 
D)  greater customer satisfaction 
E)  greater seasonality

Question 10

Professor Very Busy needs to allocate time next week to include time for office hours. He needs to forecast the number of students who will seek appointments. He has gathered the following data: $$\begin{array} { l l } 
\text { Week } & \text {\# Students } \
\hline 6 \text { weeks ago } & 83 \
5 \text { weeks ago } & 110 \
4 \text { weeks ago } & 95 \
3 \text { weeks ago } & 80 \
2 \text { weeks ago } & 65 \
\text { Last week } & 50
\end{array}$$ What is this week's forecast using trend-adjusted (double) smoothing with alpha = .5 and beta = .1, if the forecast for last week was 65, the forecast for two weeks ago was 75, and the trend estimate for last week's forecast was -5?

Accepted Answer

A)  49.3 
B)  50.6 
C)  51.3 
D)  65.4 
E)  78.7 
A)  49.3 
B)  50.6 
C)  51.3 
D)  65.4 
E)  78.7

Question 11

A consumer survey is an easy and sure way to obtain accurate input from future customers since most people enjoy participating in surveys.

Accepted Answer

A) True 
 B)False

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 naive approach?

Accepted Answer

A)  2,000 
B)  2,200 
C)  2,800 
D)  3,000 
E)  4,300 
A)  2,000 
B)  2,200 
C)  2,800 
D)  3,000 
E)  4,300

Question 13

The more novel a new product or service design is, the more forecasters have to rely on:

Accepted Answer

A)  subjective estimates. 
B)  seasonality. 
C)  cyclicality. 
D)  historical data. 
E)  smoothed variation. 
A)  subjective estimates. 
B)  seasonality. 
C)  cyclicality. 
D)  historical data. 
E)  smoothed variation.

Question 14

Bias is measured by the cumulative sum of forecast errors.

Accepted Answer

A) True 
 B)False

Question 15

A seasonal relative (or seasonal indexes) is expressed as a percentage of average or trend.

Accepted Answer

A) True 
 B)False

Question 16

In order to compute seasonal relatives, the trend of past data must be computed or known, which means that for brand-new products this approach cannot be used.

Accepted Answer

A) True 
 B)False

Question 17

The forecasting method which uses anonymous questionnaires to achieve a consensus forecast is:

Accepted Answer

A)  sales force opinions. 
B)  consumer surveys. 
C)  the Delphi method. 
D)  time series analysis. 
E)  executive opinions. 
A)  sales force opinions. 
B)  consumer surveys. 
C)  the Delphi method. 
D)  time series analysis. 
E)  executive opinions.

Question 18

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 a four-year simple moving average?

Accepted Answer

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

Question 19

The naive forecast can serve as a quick and easy standard of comparison against which to judge the cost and accuracy of other techniques.

Accepted Answer

A) True 
 B)False

Question 20

Which is not a characteristic of simple moving averages applied to time series data?

Accepted Answer

A)  smoothes random variations in the data 
B)  weights each historical value equally 
C)  lags changes in the data 
D)  requires only last period's forecast and actual data 
E)  smoothes real variations in the data 
A)  smoothes random variations in the data 
B)  weights each historical value equally 
C)  lags changes in the data 
D)  requires only last period's forecast and actual data 
E)  smoothes real variations in the data

Exam 3: Forecasting

Time-series techniques involve the identification of explanatory variables that can be used to predict future demand.

Use linear regression to develop a predictive model for demand for burial vaults based on sales of caskets. Year Sales of Caskets (000) Demand for Vaults (000) 1 8 5 2 7 2 3 10 6 4 6 4

Given forecast errors of 4, 8, and -3, what is the mean absolute deviation?

A moving average forecast tends to be more responsive to changes in the data series when more data points are included in the average.

A manager is using the equation below to forecast quarterly demand for a product: Yt = 6,000 + 80t where t = 0 at Q2 of last year Quarter relatives are Q1 = .6, Q2 = .9, Q3 = 1.3, and Q4 = 1.2. What forecasts are appropriate for the last quarter of this year and the first quarter of next year?

Given the following historical data, what is the simple three-period moving average forecast for period 6? Period Value 1 73 2 68 3 65 4 72 5 67

An advantage of a weighted moving average is that recent actual results can be given more importance than what occurred a while ago.

Which of the following mechanisms for enhancing profitability is most likely to result from improving short-term forecast performance?

A consumer survey is an easy and sure way to obtain accurate input from future customers since most people enjoy participating in surveys.

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: Year Enrollment Four years ago 2000 Three years ago 2200 Two years ago 2800 Last year 3000 What is this year's forecast using the naive approach?

The more novel a new product or service design is, the more forecasters have to rely on:

Bias is measured by the cumulative sum of forecast errors.

A seasonal relative (or seasonal indexes) is expressed as a percentage of average or trend.

In order to compute seasonal relatives, the trend of past data must be computed or known, which means that for brand-new products this approach cannot be used.

The forecasting method which uses anonymous questionnaires to achieve a consensus forecast is:

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 is this year's forecast using a four-year simple moving average?

The naive forecast can serve as a quick and easy standard of comparison against which to judge the cost and accuracy of other techniques.

Which is not a characteristic of simple moving averages applied to time series data?

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 is using the equation below to forecast quarterly demand for a product: Y_t = 6,000 + 80t where t = 0 at Q2 of last year Quarter relatives are Q1 = .6, Q2 = .9, Q3 = 1.3, and Q4 = 1.2. What forecasts are appropriate for the last quarter of this year and the first quarter of next year?