Exam 6: Forecasting

Linear trend analysis assumes:

If an economic time series is growing by a constant dollar amount each period, the most accurate forecast model is:

Social habits that produce an annual pattern in a time series result in:

A panel consensus formed by providing feedback without direct identification of individual positions is called:

Sales Forecast Modeling. The change in the quantity of Beta service demanded in any given week is inversely proportional to the change in sales by Alpha in the previous week. That is, if sales of Alpha rose by X percent last week, sales of Beta can be expected to fall by 0.5X percent this week. A. Write the equation for next week's sales of Beta, using the symbols B = sales of Beta services, A = Alpha sales, and t = time. Assume there will be no shortages of either product. B. Last week 200 units of Beta and 450 units of Alpha were sold. Two weeks ago, 300 units of Alpha were sold. What would you predict the sales of Beta to be this week?

The Delphi method:

Growth trend analysis assumes:

Annual Compounding. The following table shows annual sales data for Security Watch, Inc., over the ten-year 1998-2008 period: A. Calculate the 1998-2008 growth rate in sales using the constant rate of change model with annual compounding. B. Forecast sales for the years 2011 and 2016.

To predict the effects on a particular industry of changes in other sectors of the economy forecasters should employ:

Sales Forecast Modeling. The change in the quantity of product C demanded in any given week is inversely proportional to the change in sales of product D in the previous week. That is, if sales of D rose by X percent last week, sales of C can be expected to fall by X percent this week. A. Write the equation for next week's sales of C, using the symbols C = sales of product C, D = sales of product D, and t = time. Assume there will be no shortages of either product. B. Last week 750 units of C and 600 units of D were sold. Two weeks ago, 500 units of product D were sold. What would you predict the sales of C to be this week?

A diffusion index that registers 40% indicates that:

Qualitative methods and market experiments work best for forecasting product:

A 5% growth trend with annual compounding:

The accuracy of an econometric forecast would be most questionable when the:

Time-series methods:

Lagging economic indicators include:

Annual Compounding. The following table shows annual sales data for Stuff Happens, Inc., over the ten-year 1998-2008 period: A. Calculate the 1998-2008 growth rate in sales using the constant rate of change model with annual compounding. B. Forecast sales for the years 2011 and 2013.

Annual Compounding. The following table shows annual sales data for Nanotechnology, Inc., over the ten-year 1995-2005 period: A. Calculate the 1995-2005 growth rate in sales using the constant rate of change model with annual compounding. B. Forecast sales for the years 2010 and 2015.

Sales Forecasting. Samurai, Ltd., must forecast sales for a popular trivia game in order to avoid stockouts or excessive inventory charges during the coming Christmas season. In percentage terms, the company estimates that game sales fall at double the rate of price increases and grow at five times the rate of customer traffic increases. Furthermore, these effects seem to be independent. A. Write an equation for estimating the Christmas season sales, using the symbols S = sales, P = price, T = traffic, and t = time. B. Forecast this season's sales if Samurai sold 10,000 games last season at $20 each, this season's price is anticipated to be $25, and customer traffic is expected to rise by 10% over previous levels.

Continuous Compounding. Mark Greene, a control supervisor for County General, Inc., is concerned about an increase in distribution costs per unit from $24.50 to $25 over the last four years. Greene feels that setting up a new direct-sales distribution network at a cost of $27.50 per unit may soon be desirable. A. Calculate the unit cost growth rate using the constant rate of change model with continuous compounding. B. Forecast when unit distribution costs will exceed the current cost of direct-sales distribution.