Question 1

Using the data that follows,compute the seasonal indices for January,February,and March using the simple average method.

Accepted Answer

A) January: 0.10,February: 0.88,March: 0.92 
B) January: 0.97,February: 1.01,March: 0.72 
C) January: 0.87,February: 1.08,March: 0.92 
D) January: 0.97,February: 0.88,March: 0.92 
A) January: 0.10,February: 0.88,March: 0.92 
B) January: 0.97,February: 1.01,March: 0.72 
C) January: 0.87,February: 1.08,March: 0.92 
D) January: 0.97,February: 0.88,March: 0.92

Question 2

Which of the following variations cannot be predicted and can be identified only after occurrence?

Accepted Answer

A) random variations 
B) irregular variations 
C) seasonal variations 
D) cyclical variations 
A) random variations 
B) irregular variations 
C) seasonal variations 
D) cyclical variations

Question 3

Which of the following is NOT used to evaluate the validity of the regression equation for forecasting?

Accepted Answer

A) standard error of the estimate 
B) coefficient of determination 
C) correlation coefficient 
D) mean absolute deviation (MA
D)  
A) standard error of the estimate 
B) coefficient of determination 
C) correlation coefficient 
D) mean absolute deviation (MA
D)

Question 4

______ is a part or component of an end product whose demand depends on the demand for the end product.

Accepted Answer

A) Dependent demand item 
B) Independent demand item 
C) Variable demand item 
D) Seasonal demand item 
A) Dependent demand item 
B) Independent demand item 
C) Variable demand item 
D) Seasonal demand item

Question 5

"Cancellation of the positive and negative forecast errors can distort the information." This is a drawback of ______.

Accepted Answer

A) mean squared error (MS
E)  
B) mean absolute deviation (MA
D)  
C) mean absolute percentage error (MAP
E)  
D) cumulative sum error (CS
E)  
A) mean squared error (MS
E)  
B) mean absolute deviation (MA
D)  
C) mean absolute percentage error (MAP
E)  
D) cumulative sum error (CS
E)

Question 6

Which of the following models can be used when demand exhibits different types of changing trend patterns?

Accepted Answer

A) simple exponential smoothing 
B) second-order or double smoothing 
C) third-order or triple smoothing 
D) linear trend multiplicative method 
A) simple exponential smoothing 
B) second-order or double smoothing 
C) third-order or triple smoothing 
D) linear trend multiplicative method

Question 7

In linear regression analysis,the term predicted variable is another name for ______.

Accepted Answer

A) independent variable 
B) random variable 
C) dependent variable 
D) discrete variable 
A) independent variable 
B) random variable 
C) dependent variable 
D) discrete variable

Question 8

Which of the following is FALSE about exponential smoothing models?

Accepted Answer

A) They create accurate forecasts. 
B) They lend themselves to large-scale forecasting. 
C) They are not very adaptive. 
D) They can be easily applied and automated. 
A) They create accurate forecasts. 
B) They lend themselves to large-scale forecasting. 
C) They are not very adaptive. 
D) They can be easily applied and automated.

Question 9

The smoothing constant can take a value between ______.

Accepted Answer

A) -1 to +1 
B) 0 to 1 
C) -1 to 0 
D) -∞ to +∞ 
A) -1 to +1 
B) 0 to 1 
C) -1 to 0 
D) -∞ to +∞

Question 10

Past behavior of demand is indicative of its future behavior,therefore past demand data can be used to construct demand forecasts.This statement is the underlying principle of the ______ method.

Accepted Answer

A) causal 
B) market research 
C) time series analysis 
D) Delphi 
A) causal 
B) market research 
C) time series analysis 
D) Delphi

Question 11

Which of the following statements is FALSE about good forecasts?

Accepted Answer

A) Short-term forecasts tend to be more accurate than long-term forecasts. 
B) Aggregate forecasts for groups of products or services tend to be more accurate than forecasts for individual products. 
C) The forecasts for dependent-demand items are more accurate than forecasts for independent-demand items. 
D) Long-term forecasts tend to be more accurate than short-term forecasts. 
A) Short-term forecasts tend to be more accurate than long-term forecasts. 
B) Aggregate forecasts for groups of products or services tend to be more accurate than forecasts for individual products. 
C) The forecasts for dependent-demand items are more accurate than forecasts for independent-demand items. 
D) Long-term forecasts tend to be more accurate than short-term forecasts.

Question 12

Which of the following is a component of trend-adjusted forecast (TAF)?

Accepted Answer

A) leading indicators 
B) seasonal indices 
C) trend factors 
D) tracking signals 
A) leading indicators 
B) seasonal indices 
C) trend factors 
D) tracking signals

Question 13

A tracking signal value that goes outside the control limits implies ______.

Accepted Answer

A) the forecasting method being used is good and no changes are required 
B) the forecasting method being used should be modified/changed 
C) the forecasting method is under control 
D) the new tracking signals should be used 
A) the forecasting method being used is good and no changes are required 
B) the forecasting method being used should be modified/changed 
C) the forecasting method is under control 
D) the new tracking signals should be used

Question 14

The forecast time horizon for tactical decision-making is ______.

Accepted Answer

A) short term 
B) medium term 
C) long term 
D) very long term 
A) short term 
B) medium term 
C) long term 
D) very long term

Question 15

______ is a forecasting method in which it is assumed that the demand in the next period will be the same as it is in the current period.

Accepted Answer

A) Moving average 
B) Naïve approach 
C) Simple average 
D) Sales force opinion 
A) Moving average 
B) Naïve approach 
C) Simple average 
D) Sales force opinion

Question 16

A ______ trend often occurs when new products are introduced.

Accepted Answer

A) linear 
B) nonlinear 
C) no trend (level demand) 
D) damped 
A) linear 
B) nonlinear 
C) no trend (level demand) 
D) damped

Question 17

Which of the following is a model of combining the trend and seasonal components?

Accepted Answer

A) subtractive 
B) multiplicative 
C) trend-adjusted exponential smoothing 
D) linear trend analysis 
A) subtractive 
B) multiplicative 
C) trend-adjusted exponential smoothing 
D) linear trend analysis

Question 18

Which of the following methods can be used to evaluate the trend component of a time series?

Accepted Answer

A) simple moving average 
B) trend-adjusted exponential smoothing 
C) simple linear regression 
D) multiple linear regression 
A) simple moving average 
B) trend-adjusted exponential smoothing 
C) simple linear regression 
D) multiple linear regression

Question 19

Factors that capture the seasonal contribution to demand in each period during the year are called ______.

Accepted Answer

A) seasonal patterns 
B) seasonal indices 
C) seasonal signals 
D) seasonal indicators 
A) seasonal patterns 
B) seasonal indices 
C) seasonal signals 
D) seasonal indicators

Question 20

In ______ method,the seasonal indices are expressed as percentage and the combined forecast is expressed as percentage adjustments of the underlying linear trend.

Accepted Answer

A) linear trend analysis 
B) trend-adjusted exponential smoothing 
C) linear trend multiplicative 
D) linear trend additive 
A) linear trend analysis 
B) trend-adjusted exponential smoothing 
C) linear trend multiplicative 
D) linear trend additive

Exam 16: Demand Forecasting Methods

Using the data that follows,compute the seasonal indices for January,February,and March using the simple average method.

Which of the following variations cannot be predicted and can be identified only after occurrence?

Which of the following is NOT used to evaluate the validity of the regression equation for forecasting?

______ is a part or component of an end product whose demand depends on the demand for the end product.

"Cancellation of the positive and negative forecast errors can distort the information." This is a drawback of ______.

Which of the following models can be used when demand exhibits different types of changing trend patterns?

In linear regression analysis,the term predicted variable is another name for ______.

Which of the following is FALSE about exponential smoothing models?

The smoothing constant can take a value between ______.

Past behavior of demand is indicative of its future behavior,therefore past demand data can be used to construct demand forecasts.This statement is the underlying principle of the ______ method.

Which of the following statements is FALSE about good forecasts?

Which of the following is a component of trend-adjusted forecast (TAF)?

A tracking signal value that goes outside the control limits implies ______.

The forecast time horizon for tactical decision-making is ______.

______ is a forecasting method in which it is assumed that the demand in the next period will be the same as it is in the current period.

A ______ trend often occurs when new products are introduced.

Which of the following is a model of combining the trend and seasonal components?

Which of the following methods can be used to evaluate the trend component of a time series?

Factors that capture the seasonal contribution to demand in each period during the year are called ______.

In ______ method,the seasonal indices are expressed as percentage and the combined forecast is expressed as percentage adjustments of the underlying linear trend.

Introduction to Managing Global Operations and Supply Chains

Operations and Supply Chain Strategies

Project Management

Supplement: Project Management

Product and Service Innovations

Supplement: Reliability

Managing for Quality

Quality Improvement and Control Tools

Capacity Planning

Supply Chain Design and Location Planning

Process Design and Layout Planning

Supplement: Tools for Analyzing, Designing, and Selecting Processes and Layouts

Supplier Management

Logistics Management

Demand Management and Customer Service

Lean Operations and Supply Chains

Inventory Management

Inventory Control Models

Sales and Operations Planning

Master Scheduling and Material Requirements Planning

Supplement: Capacity Requirements Planning, MRP II, ERP, and DRP

Detailed Scheduling

Linear Programming

The Transportation Models

Waiting Line Models

Simulation

Learning Curves

Decision-Making Tools

Filters