Table 10.2 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: \[\begin{array} { | c | c | } \hline \text { Week } & \begin{array} { c } \text { No. Special } \\ \text { Pizzas } \end{array} \\ \hline 1 & 50 \\ 2 & 65 \\ 3 & 53 \\ 4 & 56 \\ 5 & 55 \\ 6 & 60 \\ \hline \end{array}\] -Use the information from Table 10.2.Using a four-week moving average,what is the forecast for week 7?

A) less than or equal to 58 B) greater than 58 but less than or equal to 60 C) greater than 60 but less than or equal to 62 D) greater than 62 A) less than or equal to 58 B) greater than 58 but less than or equal to 60 C) greater than 60 but less than or equal to 62 D) greater than 62 A

Table 10.2 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: \[\begin{array} { | c | c | } \hline \text { Week } & \begin{array} { c } \text { No. Special } \\ \text { Pizzas } \end{array} \\ \hline 1 & 50 \\ 2 & 65 \\ 3 & 53 \\ 4 & 56 \\ 5 & 55 \\ 6 & 60 \\ \hline \end{array}\] -Use the information from Table 10.2.If a four-week weighted moving average were used,what would be the forecast for week 7? (The weights are 0.77,0.11,0.11,and 0.01.)

A) less than or equal to 58 B) greater than 58 but less than or equal to 59 C) greater than 59 but less than or equal to 60 D) greater than 60 A) less than or equal to 58 B) greater than 58 but less than or equal to 59 C) greater than 59 but less than or equal to 60 D) greater than 60

Table 10.3 \[\begin{array} { | c | c | } \hline \text { Week } & \begin{array} { c } \text { Patient } \\ \text { Arrivals } \end{array} \\ \hline 1 & 401 \\ 2 & 380 \\ 3 & 411 \\ 4 & 384 \\ \hline \end{array}\] -Use the information in Table 10.3.Compute a three-week moving average forecast for the arrival of medical clinic patients in week 5.

A) less than or equal to 382 B) greater than 382 but less than or equal to 389 C) greater than 389 but less than or equal to 396 D) greater than 396 A) less than or equal to 382 B) greater than 382 but less than or equal to 389 C) greater than 389 but less than or equal to 396 D) greater than 396

Table 10.4 \[\begin{array} { | l | c | } \hline { \text { Month } } & \begin{array} { c } \text { Actual } \\ \text { Sales } \end{array} \\ \hline \text { Tanuary } & 23 \\ \text { February } & 18 \\ \text { March } & 22 \\ \text { April } & 28 \\ \text { May } & 24 \\ \hline \end{array}\] -Use the information in Table 10.4.Suppose actual sales in June turn out to be 40 units.Use the three-month moving average method to forecast the sales in July.

A) less than or equal to 27 B) greater than 27 but less than or equal to 29 units C) greater than 29 but less than or equal to 31 units D) greater than 31 units A) less than or equal to 27 B) greater than 27 but less than or equal to 29 units C) greater than 29 but less than or equal to 31 units D) greater than 31 units

Exam 10: Managing Demand and Forecasting

Table 10.2 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: Week No. Special Pizzas 1 50 2 65 3 53 4 56 5 55 6 60 -Use the information from Table 10.2.Using a four-week moving average,what is the forecast for week 7?

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Question 1

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Indicate the possible range for alpha and explain the significance of where this value is set for simple exponential smoothing.

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Alpha is a smoothing constant that influences the stability and responsiveness of the forecast.Its range is a decimal between zero and one,and the values of between 0.1 and 0.3 are most often used.Higher values are more responsive,lower values are more stable.

For time series methods of forecasting,explain the distinction between the simple moving average method and the weighted moving average method.

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The simple moving average method involves calculating the average demand for the most recent time periods,and using that average as a forecast for the next time period.After the actual demand for the period is known,in turn demand for the oldest period included in the average is replaced with the most recent period and average demand is recalculated.In this way,the most recent periods of demand are always being used to forecast the demand for the next,so that the average "moves" from period to period.With the simple moving average method,each period used to calculate the average used as and the forecast a value for the next period has the same weight.This method is most useful when demand has no pronounced trend or seasonal fluctuations..The number of periods of past demand used to calculate the average depends on how stable the demand series is.Larger values of n should be used for relatively stable demand series.Smaller values are of n should be used if the demand series is less stable.
The weighted moving average method is based on the same approach as a simple moving average except that each historical demand period used to calculate the forecast value of demand can have a different weight,with the sum of the weights equaling 1.The advantage of the weighted moving average method is that it allows you to emphasize recent demand periods over earlier demand periods.

Linear regression analysis always involves predicting one dependent variable based on one independent variable.

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Question 4

Table 10.2 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: Week No. Special Pizzas 1 50 2 65 3 53 4 56 5 55 6 60 -Use the information from Table 10.2.If a four-week weighted moving average were used,what would be the forecast for week 7? (The weights are 0.77,0.11,0.11,and 0.01.)

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Question 5

List three quantitative forecasting methods.

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Question 6

A seasonal demand time series has a repeatable of pattern increases or decreases in demand based on the week,month,or seasons of the year.

(True/False)

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Question 7

Table 10.2 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: Week No. Special Pizzas 1 50 2 65 3 53 4 56 5 55 6 60 -Demands for a newly developed salad bar at the Great Professional restaurant for the first six months of this year are shown below. Month Demand (Units) January 394 February 365 March 380 April 439 May 412 June 467 What is the forecast for July if the weighted moving average method is used? (Use weights of 0.5 for the most recent demand,0.3,and 0.2.)

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Question 8

There will be a lag behind the trend in actual demand when using single smooth forecasts.

(True/False)

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Question 9

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

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Question 10

One of the basic time series patterns is trend.

(True/False)

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Question 11

The ________ is a process of gaining consensus from a group of experts while maintaining their anonymity.

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Question 12

Table 10.3 Week Patient Arrivals 1 401 2 380 3 411 4 384 -Use the information in Table 10.3.Compute a three-week moving average forecast for the arrival of medical clinic patients in week 5.

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Question 13

________ is the process of adjusting price at the right time for different customer segments to maximize revenues generated from existing supply capacity.

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Question 14

The stability of a moving average forecast is inversely related to the number of periods included in the moving average.

(True/False)

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Question 15

When the underlying mean of a time series is very stable and there are no trend,cyclical,or seasonal influences,

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Question 16

The Delphi method is a process of gaining consensus from a group of experts while maintaining their anonymity.

(True/False)

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Question 17

Table 10.4 Month Actual Sales Tanuary 23 February 18 March 22 April 28 May 24 -Use the information in Table 10.4.Suppose actual sales in June turn out to be 40 units.Use the three-month moving average method to forecast the sales in July.

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Question 18

With the trend-adjusted exponential smoothing method,

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Question 19

________ methods of forecasting translate the opinions of management,experts,consumers,or sales force into quantitative estimates.

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Question 20

Indicate the possible range for alpha and explain the significance of where this value is set for simple exponential smoothing.

For time series methods of forecasting,explain the distinction between the simple moving average method and the weighted moving average method.

Linear regression analysis always involves predicting one dependent variable based on one independent variable.

List three quantitative forecasting methods.

A seasonal demand time series has a repeatable of pattern increases or decreases in demand based on the week,month,or seasons of the year.

There will be a lag behind the trend in actual demand when using single smooth forecasts.

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

One of the basic time series patterns is trend.

The ________ is a process of gaining consensus from a group of experts while maintaining their anonymity.

Table 10.3 Week Patient Arrivals 1 401 2 380 3 411 4 384 -Use the information in Table 10.3.Compute a three-week moving average forecast for the arrival of medical clinic patients in week 5.

________ is the process of adjusting price at the right time for different customer segments to maximize revenues generated from existing supply capacity.

The stability of a moving average forecast is inversely related to the number of periods included in the moving average.

When the underlying mean of a time series is very stable and there are no trend,cyclical,or seasonal influences,

The Delphi method is a process of gaining consensus from a group of experts while maintaining their anonymity.

Table 10.4 Month Actual Sales Tanuary 23 February 18 March 22 April 28 May 24 -Use the information in Table 10.4.Suppose actual sales in June turn out to be 40 units.Use the three-month moving average method to forecast the sales in July.

With the trend-adjusted exponential smoothing method,

________ methods of forecasting translate the opinions of management,experts,consumers,or sales force into quantitative estimates.

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