Exam 11: Forecasting and Demand Planning

Using the sales data on a particular model of a DVD player shown below in Table 4, answer question Table 4 Month Sales Jan 35 Feb 29 Mar 39 Apr 42 May 51 Jun 56 -The sales forecast for July using the data in Table 4, forecasts sales for May as 36.25, and a simple exponential smoothing model with a smoothing constant of 0.40 is:

Which is NOT true regarding simple exponential smoothing?

Ed Rogers owns an appliance store. Sales data on a particular model of a DVD player for the past six months are shown below along with the results of two different forecasting models that were developed. Month Sales Forecast 1 Forecast 2 Jan 35 30 25 Feb 29 28 27 Mar 39 43 40 Apr 42 40 39 May 51 48 41 Jun 56 55 53 Which is the better forecasting model, based on the MAD criterion?

A moving average model works best when _____ in the time series.

Seasonal patterns can occur over the weeks during a month, over days during a week, or hours during a day.

Using the sales data on a particular model of a DVD player shown below in Table 2, answer questions Table 2 Month Sales Forecast 1 Forecast 2 Jan 35 30 33 Feb 29 28 32 Mar 39 43 35 Apr 42 40 45 May 51 48 52 Jun 56 55 52 -The mean absolute deviation (MAD) for forecast 1 is:

An alternate name for planning horizon is time bucket.

A Taiwan electronics company exports personal computers (PCs) to the U.S. Their PC sales (in thousands) over the past five years are given below in Table 6. Table 6 Year Sales 1 6 2 9 3 13 4 15 5 20 -The simple regression intercept (a) and the slope (b) for the data in Table 6 is:

_____ forecasts are needed for planning production schedules and to assign workers to jobs.

The manager of a gas station along an interstate highway has observed that gasoline sales generally increase each week over the summer months as more families travel by car on vacations. He also believes that sales are sensitive to fluctuations in the price of gasoline. He developed the following regression model: Sales ($) = $59,407 + $509 (Week) + 16,463 (Price/gallon) -Which one of the following statements is TRUE?

Explain the difference between statistical forecasting and judgment forecasting.

Regular patterns in a data series that take place over long periods of time are called _____.

Based on the information shown below in Table 5, develop a forecast for June using both the two-period moving average model and the exponential smoothing model with ? = 0.10. For the exponential smoothing model, assume the forecast for February is 800. Answer questions Table 5 Month Actual Demand February 850 March 900 April 975 May 950 -The exponential smoothing model forecast for March is:

The method of least squares maximizes the sum of the squared deviations between the actual time-series values and the estimated values of the dependent variable.

The Delphi method is a forecasting approach that is based on expert opinion.

The forecasting technique that works best for short planning horizons is _____.

Which of the following is NOT a characteristic of a time series?

A major biotechnology company has developed a new drug for arthritis victims using gene-splicing technology. It has been on the market for five months and has experienced the following sales (in thousands of dollars): Month Sales January 26 February 32 March 34 April 34 May 36 a. What is the exponential smoothing forecast for May assuming that January sales is also the initial forecast, and the alpha value is 0.5? b. What is the exponential smoothing forecast for May assuming that January sales is also the initial forecast, and the alpha value is 0.8? c. What is the mean absolute deviation (MAD) for exponentially smoothed forecasts for the months March to May assuming that January sales is also the initial forecast, and the alpha value is 0.5? d. What is the MAD for exponentially smoothed forecasts for the months March to May assuming that January sales is also the initial forecast, and the alpha value is 0.8? e. What is the tracking signal for exponentially smoothed forecasts for the months March to May assuming that January sales is also the initial forecast, and the alpha value is 0.5? f. What is the tracking signal for exponentially smoothed forecasts for the months March to May assuming that January sales value is 0.8?

Using the data shown below in Table 3 for the sales of a new CD at a store for the last 4 weeks, answer the questions Table 3 Week 1 2 3 4 Sales 112 105 125 118 -The three-period moving average for the next week (week 5) is:

In an exponential smoothing model, larger values of alpha place less emphasis on recent data.