Exam 10: Managing Demand and Forecasting

In relation to forecasting,there are no natural laws that make the relationship between demand and other variables continue to behave as they have done in the past.

A(n)________ is an accumulation of customer orders that a manufacturer has promised for delivery at some future date.

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?

There is an expectation that forecasting models do make errors.

Table 10.7 Month Units Sold (00) 1 150 2 145 3 160 4 180 5 220 -The Classical Consultant Company provides forecasting research for clients such as a group of five doctors associated with a new hospital health maintenance program.The company has been asked to forecast the number of patients requesting blood analysis per week.The past weekly average is 38 and for the trend is 2 per week.This week's demand was 42 blood tests.How many patients Will come next week? (Suppose ? = 0.10 and ? = 0.30.)

Which forecasting technique would you consider for technological forecasts?

Table 10.9 Quarter Forecasted Demand (Units) Actual Demand (Units) 1 85 95 2 55 55 3 70 45 4 60 75 -Use the information in Table 10.9.What is the mean absolute deviation of forecast errors for the data?

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?

Table 10.8 A manager wants to forecast the monthly demand for a machine the company produces. Month No. Machines Sold 1 50 2 65 3 52 4 56 5 55 6 60 -The management of a company specializing in securities analysis has been using two forecasting methods to follow a new stock issue. Forecast Method Month Exponential Smoothing Judgmental Actual Price 1 48 50 51 2 50 52 53 3 51 55 54 Which one of the following statements is TRUE?

The mean forecast error (MFE)will approach one,if there is no bias in the forecasting model.

Table 10.4 Month Actual Sales Tanuary 23 February 18 March 22 April 28 May 24 -Use the information in Table 10.4.What is the forecast for July with the two-month moving average method and June sales of 40 units?

Forecast error is simply the difference between the forecast and actual demand.

Use the following quarterly data to develop the seasonal indexes: Quarter Year 1 Year 2 Year 3 1 205 198 240 2 389 415 420 3 475 530 554 4 257 293 307 Total 1326 1436 1521 The manager predicts that the demand for next year will be 1625.What are the quarterly forecasts for next year?

________ is a weighted moving average time-series method that gives recent demands more weight than earlier demands.

Discuss the tracking signal.

Which one of the following statements about the patterns of a demand series is FALSE?

A trend in a time series is a systematic increase or decrease in the average of the series over time.

Table 10.9 Quarter Forecasted Demand (Units) Actual Demand (Units) 1 85 95 2 55 55 3 70 45 4 60 75 -Use the information in Table 10.9.What is the standard deviation of forecast errors for the data?

Table 10.7 Month Units Sold (00) 1 150 2 145 3 160 4 180 5 220 -Use the information in Table 10.7.What is the MAD for months 2 through 5?

The exponential smoothing method is a sophisticated weighted moving average method.