Exam 4: Forecasting

What are the differences between quantitative and qualitative forecasting methods?

Cycles and random variations are both components of time series.

Given an actual demand of 103, a previous forecast value of 99, and an alpha of .4, the exponential smoothing forecast for the next period would be

The forecasting model that pools the opinions of a group of experts or managers is known as the

A time-series model uses a series of past data points to make the forecast.

Marie Bain is the production manager at a company that manufactures hot water heaters. Marie needs a demand forecast for the next few years to help decide whether to add new production capacity. The company's sales history (in thousands of units) is shown in the table below. Use exponential smoothing with trend adjustment, to forecast demand for period 6. The initial forecast for period 1 was 11 units; the initial estimate of trend was 0. The smoothing constants are α = .3 and β = .3

Distinguish between a moving average model and an exponential smoothing model.

A management analyst is using exponential smoothing to predict merchandise returns at an upscale branch of a department store chain. Given an actual number of returns of 154 items in the most recent period completed, a forecast of 172 items for that period, and a smoothing constant of 0.3, what is the forecast for the next period? How would the forecast be changed if the smoothing constant were 0.6? Explain the difference in terms of alpha and responsiveness.

Regression lines graphically depict "cause-and-effect" relationships.

Describe three popular measures of forecast accuracy.

Computer monitoring of tracking signals and self-adjustment if a signal passes a preset limit is characteristic of

Technological forecasts address the business cycle by predicting inflation rates, money supplies, housing starts, and other planning indicators.

Forecasts are usually classified by time horizon into three categories

Identify four quantitative forecasting methods.

Which time-series model below assumes that demand in the next period will be equal to the most recent period's demand?

Which of the following is not a step in the forecasting process?

In trend projection, the trend component is the slope of the regression equation.

Many service firms use point-of-sale computers to collect detailed records needed for accurate short-term forecasts.

What is the key difference between weighted moving average and simple moving average approaches to forecasting?

Distinguish a dependent variable from an independent variable.