Exam 5: Forecasting

The decomposition approach to forecasting (using trend and seasonal components)may be helpful when attempting to forecast a TIME SERIES.Could an analogous approach be used in multiple regression analysis? Explain briefly.

Bias is the average error of a forecast model.

A scatter diagram is useful to determine if a relationship exists between two variables.

If the Q1 demand for a particular year is 200 and the seasonal index is 0.85,what is the deseasonalized demand value for Q1?

Mean absolute deviation (MAD)is simply the sum of forecast errors.

Which of the following is not considered to be one of the components of a time series?

A seasonal index of 1 means that the season is average.

What is one advantage of using causal models over TIME SERIES or qualitative models?

Daily demand for newspapers for the last 10 days has been as follows: 12,13,16,15,12,18,14,12,13,15 (listed from oldest to most recent).Forecast sales for the next day using a two-day weighted moving average where the weights are 3 and 1.

A judgmental forecasting technique that uses decision makers,staff personnel,and respondent to determine a forecast is called

In a weighted moving average,the weights assigned must sum to 1.

TIME SERIES models attempt to predict the future by using historical data.

Given the following data and seasonal index: (a)Compute the seasonal index using only year 1 data. (b)Determine the deseasonalized demand values using year 2 data and year 1's seasonal indices. (c)Determine the trend line on year 2's deseasonalized data. (d)Forecast the sales for the first 3 months of year 3,adjusting for seasonality.

When is the exponential smoothing model equivalent to the naïve forecasting model?

Enrollment in a particular class for the last four semesters has been 120,126,110,and 130 (listed from oldest to most recent).Develop a forecast of enrollment next semester using exponential smoothing with an alpha = 0.2.Assume that an initial forecast for the first semester was 120 (so the forecast and the actual were the same).

Average starting salaries for students using a placement service at a university have been steadily increasing.A study of the last four graduating classes indicates the following average salaries: $30,000,$32,000,$34,500,and $36,000 (last graduating class).Predict the starting salary for the next graduating class using a simple exponential smoothing model with α = 0.25.Assume that the initial forecast was $30,000 (so that the forecast and the actual were the same).

A moving average forecasting method is a causal forecasting method.

A seasonal index of ________ indicates that the season is average.

Multiple regression may be used to forecast both trend and seasonal components present in a time series.

Enrollment in a particular class for the last four semesters has been 122,128,100,and 155 (listed from oldest to most recent).The best forecast of enrollment next semester,based on a three-semester moving average,would be