Question 1

If a forecast is consistently greater than (or less than) actual values, the forecast is said to be biased.

Accepted Answer

A) True 
 B)False  True

Question 2

________ is a measure of overall forecast error for a model.

Accepted Answer

MAD or Mean Absolute Deviation

Question 3

Forecasts

Accepted Answer

A)  become more accurate with longer time horizons. 
B)  are rarely perfect. 
C)  are more accurate for individual items than for groups of items. 
D)  are more accurate for new products than for existing products. 
E)  are impossible to make. 
A)  become more accurate with longer time horizons. 
B)  are rarely perfect. 
C)  are more accurate for individual items than for groups of items. 
D)  are more accurate for new products than for existing products. 
E)  are impossible to make. B

Question 4

A skeptical manager asks what short-range forecasts can be used for. Give her three possible uses/purposes.

Accepted Answer

Any three of: planning purchas

Question 5

What is the approximate forecast for May using a four-month moving average? $$\begin{array} { | c | c | c | c | c | c | } 
\hline \text { Nov. } & \text { Dec. } & \text { Jan. } & \text { Feb. } & \text { Mar. } & \text { April } \
\hline 39 & 36 & 40 & 42 & 48 & 46 \
\hline
\end{array}$$

Accepted Answer

A)  38 
B)  42 
C)  43 
D)  44 
E)  47 
A)  38 
B)  42 
C)  43 
D)  44 
E)  47

Question 6

A restaurant has tracked the number of meals served at lunch over the last four weeks. The data shows little in terms of trends, but does display substantial variation by day of the week. Use the following information to determine the seasonal (daily) index for this restaurant.
 $\quad\quad\quad\quad\quad\quad\text { Week }$
$\begin{array}{|l|l|l|l|l|}
\hline \text { Day } & 1 & 2 & 3 & 4 \
\hline \text { Sunday } & 40 & 35 & 39 & 43 \
\hline \text { Monday } & 54 & 55 & 51 & 59 \
\hline \text { Tuesday } & 61 & 60 & 65 & 64 \
\hline \text { Wednesday } & 72 & 77 & 78 & 69 \
\hline \text { Thursday } & 89 & 80 & 81 & 79 \
\hline \text { Friday } & 91 & 90 & 99 & 95 \
\hline \text { Saturday } & 80 & 82 & 81 & 83 \
\hline
\end{array}$

Accepted Answer

The answer of A restaurant has tracked the number of...

Question 7

Time-series data may exhibit which of the following behaviors?

Accepted Answer

A)  trend 
B)  random variations 
C)  seasonality 
D)  cycles 
E)  They may exhibit all of the above. 
A)  trend 
B)  random variations 
C)  seasonality 
D)  cycles 
E)  They may exhibit all of the above.

Question 8

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

Accepted Answer

A)  expert judgment model. 
B)  multiple regression model. 
C)  jury of executive opinion model. 
D)  consumer market survey model. 
E)  management coefficients model. 
A)  expert judgment model. 
B)  multiple regression model. 
C)  jury of executive opinion model. 
D)  consumer market survey model. 
E)  management coefficients model.

Question 9

A skeptical manager asks what long-range forecasts can be used for. Give her three possible uses/purposes.

Accepted Answer

Any three of: planning new pro

Question 10

In time series, which of the following cannot be predicted?

Accepted Answer

A)  large increases in demand 
B)  cycles 
C)  seasonal fluctuations 
D)  random fluctuations 
E)  large decreases in demand 
A)  large increases in demand 
B)  cycles 
C)  seasonal fluctuations 
D)  random fluctuations 
E)  large decreases in demand

Question 11

A time series trend equation is 25.3 + 2.1 X. What is your forecast for period 7?

Accepted Answer

A)  23.2 
B)  25.3 
C)  27.4 
D)  40.0 
E)  cannot be determined 
A)  23.2 
B)  25.3 
C)  27.4 
D)  40.0 
E)  cannot be determined

Question 12

Give an example-other than a restaurant or other food-service firm-of an organization that experiences an hourly seasonal pattern. (That is, each hour of the day has a pattern that tends to repeat day after day.) Explain.

Accepted Answer

Answer will vary. Ho

Question 13

The degree or strength of a relationship between two variables is shown by the

Accepted Answer

A)  alpha. 
B)  mean. 
C)  mean absolute deviation. 
D)  correlation coefficient. 
E)  cumulative error. 
A)  alpha. 
B)  mean. 
C)  mean absolute deviation. 
D)  correlation coefficient. 
E)  cumulative error.

Question 14

Identify four components of a time series. Which one of these is rarely forecast? Why is this so?

Accepted Answer

Trend, seasonality, cycles, an

Question 15

Which of the following is true regarding the two smoothing constants of the Forecast Including Trend (FIT) model?

Accepted Answer

A)  One constant is positive, while the other is negative. 
B)  They are called MAD and cumulative error. 
C)  Alpha is always smaller than beta. 
D)  One constant smooths the regression intercept, whereas the other smooths the regression slope. 
E)  Their values are determined independently. 
A)  One constant is positive, while the other is negative. 
B)  They are called MAD and cumulative error. 
C)  Alpha is always smaller than beta. 
D)  One constant smooths the regression intercept, whereas the other smooths the regression slope. 
E)  Their values are determined independently.

Question 16

Seasonal indices adjust raw data for patterns that repeat at regular time intervals.

Accepted Answer

A) True 
 B)False

Question 17

Explain the role of regression models (time series and otherwise) in forecasting. That is, how is trend projection able to forecast? How is regression used for causal forecasting?

Accepted Answer

For trend projection, the independent va

Question 18

An approach to exponential smoothing in which the smoothing constant is automatically changed to keep errors to a minimum is called ________.

Accepted Answer

The answer of An approach to exponential smoothing in which...

Question 19

________ forecasts are concerned with rates of technological progress, which can result in the birth of exciting new products, requiring new plants and equipment.

Accepted Answer

The answer of ________ forecasts are concerned with rates of...

Question 20

Weekly sales of ten-grain bread at the local organic food market are in the table below. Based on this data, forecast week 9 using a five-week moving average.
$$\begin{array} { c c c } 
\text { Week } &  \text { Sales } \
\hline 1 & 415 \
2 &  389 \
3 &  420 \
4 &  382 \
5 &  410 \
6 & 432 \
7 & 405 \
8 & 421
\end{array}$$

Accepted Answer

(382 + 410

Exam 4: Forecasting

If a forecast is consistently greater than (or less than) actual values, the forecast is said to be biased.

________ is a measure of overall forecast error for a model.

Forecasts

A skeptical manager asks what short-range forecasts can be used for. Give her three possible uses/purposes.

What is the approximate forecast for May using a four-month moving average? Nov. Dec. Jan. Feb. Mar. April 39 36 40 42 48 46

Time-series data may exhibit which of the following behaviors?

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

A skeptical manager asks what long-range forecasts can be used for. Give her three possible uses/purposes.

In time series, which of the following cannot be predicted?

A time series trend equation is 25.3 + 2.1 X. What is your forecast for period 7?

Give an example-other than a restaurant or other food-service firm-of an organization that experiences an hourly seasonal pattern. (That is, each hour of the day has a pattern that tends to repeat day after day.) Explain.

The degree or strength of a relationship between two variables is shown by the

Identify four components of a time series. Which one of these is rarely forecast? Why is this so?

Which of the following is true regarding the two smoothing constants of the Forecast Including Trend (FIT) model?

Seasonal indices adjust raw data for patterns that repeat at regular time intervals.

Explain the role of regression models (time series and otherwise) in forecasting. That is, how is trend projection able to forecast? How is regression used for causal forecasting?

An approach to exponential smoothing in which the smoothing constant is automatically changed to keep errors to a minimum is called ________.

________ forecasts are concerned with rates of technological progress, which can result in the birth of exciting new products, requiring new plants and equipment.

Weekly sales of ten-grain bread at the local organic food market are in the table below. Based on this data, forecast week 9 using a five-week moving average. Week Sales 1 415 2 389 3 420 4 382 5 410 6 432 7 405 8 421

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