Question 1

Organizations that are capable of responding quickly to changing requirements can use a shorter forecast horizon and therefore benefit from more accurate forecasts.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is the most valuable piece of information the sales force can bring into forecasting situations?

Accepted Answer

A)  what customers are most likely to do in the future 
B)  what customers most want to do in the future 
C)  what customers' future plans are 
D)  whether customers are satisfied or dissatisfied with their performance in the past 
E)  what the salesperson's appropriate sales quota should be 
A)  what customers are most likely to do in the future 
B)  what customers most want to do in the future 
C)  what customers' future plans are 
D)  whether customers are satisfied or dissatisfied with their performance in the past 
E)  what the salesperson's appropriate sales quota should be

Question 3

A manager wants to choose one of two forecasting alternatives. Each alternative was tested using historical data. The resulting forecast errors for the two are shown in the table. Analyze the data and recommend a course of action to the manager. $$\begin{array} { l r r r r r r r r r } 
\text { Period (t) } & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 \
\text { Alt. \#1 } & 3 & - 2 & 0 & 2 & 1 & - 2 & 2 & - 1 & 2 \
\text { Alt.\#2 } & 4 & 3 & - 3 & - 1 & 1 & - 1 & 0 & 1 & 0
\end{array}$$

Accepted Answer

\[\begin{array} { l } 
\mathrm { MSE } \

Question 4

In exponential smoothing, an alpha of 1.0 will generate the same forecast that a naive forecast would yield.

Accepted Answer

A) True 
 B)False

Question 5

Forecasting techniques generally assume an existing causal system that will continue to exist in the future.

Accepted Answer

A) True 
 B)False

Question 6

The mean absolute deviation is used to:

Accepted Answer

A)  estimate the trend line. 
B)  eliminate forecast errors. 
C)  measure forecast accuracy. 
D)  seasonally adjust the forecast. 
E)  compute periodic forecast errors. 
A)  estimate the trend line. 
B)  eliminate forecast errors. 
C)  measure forecast accuracy. 
D)  seasonally adjust the forecast. 
E)  compute periodic forecast errors.

Question 7

Minimizing the sum of the squared deviations around the line is called:

Accepted Answer

A)  mean squared error technique. 
B)  mean absolute deviation. 
C)  double smoothing. 
D)  least squares estimation. 
E)  predictor regression. 
A)  mean squared error technique. 
B)  mean absolute deviation. 
C)  double smoothing. 
D)  least squares estimation. 
E)  predictor regression.

Question 8

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 trend-adjusted (double) smoothing with alpha = .05 and beta = .3, if the forecast for last year was 21,000, the forecast for two years ago was 19,000, and the trend estimate for last year's forecast was 1,500?

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 9

Averaging techniques are useful for:

Accepted Answer

A)  distinguishing between random and nonrandom variations. 
B)  smoothing out fluctuations in time series. 
C)  eliminating historical data. 
D)  providing accuracy in forecasts. 
E)  average people. 
A)  distinguishing between random and nonrandom variations. 
B)  smoothing out fluctuations in time series. 
C)  eliminating historical data. 
D)  providing accuracy in forecasts. 
E)  average people.

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 a three-week simple moving average?

Accepted Answer

A)  49 
B)  50 
C)  52 
D)  65 
E)  78 
A)  49 
B)  50 
C)  52 
D)  65 
E)  78

Question 11

Forecasts for groups of items tend to be less accurate than forecasts for individual items because forecasts for individual items don't include as many influencing factors.

Accepted Answer

A) True 
 B)False

Question 12

MAD is equal to the square root of MSE, which is why we calculate the easier MSE and then calculate the more difficult MAD.

Accepted Answer

A) True 
 B)False

Question 13

An advantage of trend-adjusted exponential smoothing over the linear trend equation is its ability to adjust over time to changes in the trend.

Accepted Answer

A) True 
 B)False

Question 14

A new car dealer has been using exponential smoothing with an alpha of .2 to forecast weekly new car sales. Given the data below, would a naive forecast have provided greater accuracy? Explain. Assume an initial exponential forecast of 60 units in period 2 . $$\begin{array} { l l } 
\text { Period } & \text { Demand } \
\hline  1 & 57 \
2 & 62 \
3 & 58 \
4 & 60 \
5 & 60 \
6 & 56
\end{array}$$

Accepted Answer

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

Question 15

The two general approaches to forecasting are:

Accepted Answer

A)  mathematical and statistical. 
B)  qualitative and quantitative. 
C)  judgmental and qualitative. 
D)  historical and associative. 
E)  precise and approximation. 
A)  mathematical and statistical. 
B)  qualitative and quantitative. 
C)  judgmental and qualitative. 
D)  historical and associative. 
E)  precise and approximation.

Question 16

Develop a forecast for the next period, given the data below, using a three-period moving average. $$\begin{array} { l l } 
\text { Period } & \text { Demand } \
\hline  1 & 19 \
2 & 20 \
3 & 18 \
4 & 19 \
5 & 17
\end{array}$$

Accepted Answer

The answer of Develop a forecast for the next period,...

Question 17

Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast?

Accepted Answer

A)  0 
B)  .01 
C)  .1 
D)  .5 
E)  1.0 
A)  0 
B)  .01 
C)  .1 
D)  .5 
E)  1.0

Question 18

Accuracy in forecasting can be measured by:

Accepted Answer

A)  MSE. 
B)  MRP. 
C)  MPS. 
D)  MTM. 
E)  MTE. 
A)  MSE. 
B)  MRP. 
C)  MPS. 
D)  MTM. 
E)  MTE.

Question 19

Which term most closely relates to associative forecasting techniques?

Accepted Answer

A)  time series data 
B)  expert opinions 
C)  Delphi technique 
D)  consumer survey 
E)  predictor variables 
A)  time series data 
B)  expert opinions 
C)  Delphi technique 
D)  consumer survey 
E)  predictor variables

Question 20

Which of the following changes would tend to shorten the time frame for short-term forecasting?

Accepted Answer

A)  bringing greater variety into the product mix 
B)  increasing the flexibility of the production system 
C)  ordering fewer weather-sensitive items 
D)  adding more special-purpose equipment 
E)  investing in the production system to make it more task-specific 
A)  bringing greater variety into the product mix 
B)  increasing the flexibility of the production system 
C)  ordering fewer weather-sensitive items 
D)  adding more special-purpose equipment 
E)  investing in the production system to make it more task-specific

Exam 3: Forecasting

Organizations that are capable of responding quickly to changing requirements can use a shorter forecast horizon and therefore benefit from more accurate forecasts.

Which of the following is the most valuable piece of information the sales force can bring into forecasting situations?

In exponential smoothing, an alpha of 1.0 will generate the same forecast that a naive forecast would yield.

Forecasting techniques generally assume an existing causal system that will continue to exist in the future.

The mean absolute deviation is used to:

Minimizing the sum of the squared deviations around the line is called:

Averaging techniques are useful for:

Forecasts for groups of items tend to be less accurate than forecasts for individual items because forecasts for individual items don't include as many influencing factors.

MAD is equal to the square root of MSE, which is why we calculate the easier MSE and then calculate the more difficult MAD.

An advantage of trend-adjusted exponential smoothing over the linear trend equation is its ability to adjust over time to changes in the trend.

The two general approaches to forecasting are:

Develop a forecast for the next period, given the data below, using a three-period moving average. Period Demand 1 19 2 20 3 18 4 19 5 17

Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast?

Accuracy in forecasting can be measured by:

Which term most closely relates to associative forecasting techniques?

Which of the following changes would tend to shorten the time frame for short-term forecasting?

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

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