Exam 8: Forecasting

Table 8.1 The management of an insurance company monitors the number of mistakes made by telephone service representatives for a company they have subcontracted with.The number of mistakes for the past several months appears in this table along with forecasts for errors made with three different forecasting techniques.The column labeled Exponential was created using exponential smoothing with an alpha of 0.30.The column labeled MA is forecast using a moving average of three periods.The column labeled WMA uses a 3-month weighted moving average with weights of 0.65,0.25,and 0.10 for the most-to-least recent months. -Using Table 8.1,what is the MAD for months 6-10 for the exponential smoothing technique?

Table 8.8 The manager of a pizza shop must forecast weekly demand for special pizzas so that he can order pizza shells weekly.Recent demand has been: -Use the information from Table 8.8.The pizza shop manager believes that a combination forecast might improve her ability to predict future demand,and thus improve keeping fresh ingredients on hand.She decides to use the 3-week simple moving average and 3-week weighted moving average,giving them equal weight.What is her forecast for week #7?

Which one of the following basic patterns of demand is difficult to predict because it is affected by national or international events or because of a lack of demand history reflecting the stages of demand from product development to decline?

________ analysis is a statistical approach that relies heavily on historical demand data to project the future size of demand,and it recognizes trends and seasonal patterns.

Assume that a time-series forecast is generated for future demand and subsequently it is observed that the forecast method did not accurately predict the actual demand.Specifically,the forecast errors were found to be: Mean absolute percent error = 10% Cumulative sum of forecast errors = 0 Which one of the statements concerning this forecast is TRUE?

Bias is the worst kind of forecasting error.

Table 8.3 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 8.3.What percent in the variation of the variable Books Sold is explained by the value of the variable Sales Calls Made?

Table 8.3 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 8.3.In order to realize the sale of 700 books,how many sales calls will the sales representative have to make?

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

The ________ measures the amount of variation in the dependent variable about its mean that is explained by the regression line.

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

Table 8.4 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 8.4.What is the estimated Weekly Gross Revenue if $7,000 is spent on Radio Advertising (X1)and $4,000 is spent on Newspaper Advertising (X2)?

The marketing department for a major manufacturer tracks sales and advertising expenditures each month.Data from the past nine months and regression output appear in the following table.Interpret the equation coefficients and the values for the coefficient of determination and the correlation coefficient. Created by POM-QM for Windows

Table 8.1 The management of an insurance company monitors the number of mistakes made by telephone service representatives for a company they have subcontracted with.The number of mistakes for the past several months appears in this table along with forecasts for errors made with three different forecasting techniques.The column labeled Exponential was created using exponential smoothing with an alpha of 0.30.The column labeled MA is forecast using a moving average of three periods.The column labeled WMA uses a 3-month weighted moving average with weights of 0.65,0.25,and 0.10 for the most-to-least recent months. -Using Table 8.1,what is the MSE for months 6-10 for the exponential smoothing technique?

Table 8.2 The Agricultural Extension Agent's Office has tracked fertilizer application and crop yields for a variety of chickpea and has recorded the data shown in the following table.Their staff statistician developed the regression model and computed the performance statistics displayed below the data. -Use the information provided in Table 8.2.The value of Bushels when Fertilizer is 60 is:

A simple moving average of one period will yield identical results to a naive forecast.

Table 8.8 The manager of a pizza shop must forecast weekly demand for special pizzas so that he can order pizza shells weekly.Recent demand has been: -Use the information from Table 8.8.The pizza shop manager believes that a combination forecast might improve her ability to predict future demand,and thus improve keeping fresh ingredients on hand.She decides to use the 3-week weighted moving average and exponentially smoothed average forecast,giving them equal weight.What is her forecast for week #7?

A linear regression model results in the equation Y = 15 - 23X.If the coefficient of determination is a perfect 1.0,the correlation coefficient must be -1.

How is a typical forecasting process similar to the Plan-Do-Study-Act (PDSA)cycle? (See Chapter 5 for more information on PDSA)

The repeated observations of demand for a product or service in their order of occurrence form a pattern known as a time series.