Exam 14: Forecasting

Table 14.2 A textbook publisher for books used in business schools believes that the number of books sold is related to the number of campus visits to decision makers made by their sales force.A sampling of the number of sales calls made and the number of books sold is shown in the following table. -Use the information provided in Table 14.2.What percent in the variation of the variable Books Sold is explained by the value of the variable Sales Calls Made?

Which statement about forecast accuracy is TRUE?

When a significant trend is present,exponential smoothing forecasts can be below or above the actual demand,and must therefore be modified.

A forecaster that uses a holdout set approach as a final test for forecast accuracy typically uses:

Use the data and graph shown below for the following questions. -Refer to the instruction above.What is the average seasonal index for the Sundays in the data set?

Explain how the value of alpha affects forecasts produced by exponential smoothing.

Forecast error is found by subtracting the forecast from the actual demand for a given period.

A history file of past demand will often be separated into two parts;the ________ part will reflect irregular demands.

The judgment methods of forecasting are to be used for purposes of:

A bias error results from unpredictable factors that cause the forecast to deviate from actual demand.

Table 14.11 A sales manager wants to forecast monthly sales of the machines the company makes using the following monthly sales data. -Use the information in Table 14.11.If the forecast for period 7 is $4,300,what is the forecast for period 9 using exponential smoothing with an alpha equal to 0.30?

The closer the value of the sample correlation coefficient is to -1.00,the worse the predictive ability of the independent variable for the dependent variable.

Calculate three forecasts using the following data.First,for periods 4 through 10,develop the exponentially smoothed forecasts using a forecast for period 3 (F3)of 120.0 and an alpha of 0.3.Second,calculate the three-period moving-average forecast for periods 4 through 10.Third,calculate the weighted moving average for periods 4 through 10,using weights of .60,.30,and .10.Calculate the mean absolute deviation (MAD)and the cumulative sum of forecast error (CFE)for each forecasting procedure.Which forecasting procedure would you select? Why?

A(n)________ is a portion of data from more recent time periods that is used to test different models developed from earlier time period data.

A tracking signal greater than zero and a mean absolute deviation greater than zero imply that the forecast has:

The local building supply store experienced what they considered to be irregular demands for lumber after the devastating hurricane season.These unusual data points were considered:

Table 14.4 The Furniture Super Mart is a furniture retailer in Evansville,Indiana.The Marketing Manager wants to prepare a media budget based on the next quarter's business plan.The manager wants to decide the mix of radio advertising and newspaper advertising needed to generate varying levels of Weekly Gross Revenue.The manager has collected data for the past five weeks,and has recorded the following average Weekly Gross Revenues and expenditures for Weekly Radio (X1)and Newspaper (X2)advertising: The Manager uses the multiple regression model in OM Explorer and obtains the following results: -Use the information provided in Table 14.4.What is the estimated Weekly Gross Revenue if $4,000 is spent on Radio Advertising (X1)and $7,000 is spent on Newspaper Advertising (X2)?

A(n)________ forecast is a time-series method whereby the forecast for the next period equals the demand for the current period.

Forecasts almost always contain errors.

Random variation is an aspect of demand that increases the accuracy of the forecast.