Question 1

Long-range forecasts expressed in sales dollars are more meaningful to top managers than to managers at the operations level.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statement is TRUE if the time series exhibits a negative trend in an exponential smoothing technique?

Accepted Answer

A)  The forecast will lag the actual values. 
B)  The forecast will overshoot the actual values. 
C)  The mean square error will be zero. 
D)  The alpha value will be one. 
A)  The forecast will lag the actual values. 
B)  The forecast will overshoot the actual values. 
C)  The mean square error will be zero. 
D)  The alpha value will be one.

Question 3

Irregular variation and random variation both refer to unexplainable deviation of a time series from a predictable pattern.

Accepted Answer

A) True 
 B)False

Question 4

Better operational decisions can be made by integrating forecasting with value chain and capacity management systems.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is TRUE about single exponential smoothing?

Accepted Answer

A)  Large values of alpha (α) place more emphasis on recent data. 
B)  α values range from 0.6 to 1. 
C)  Smaller values of smoothing constant have the advantage of quickly adjusting the forecasts when forecasting errors occur. 
D)  Larger values of smoothing constant do not allow the forecast to react faster to changing conditions. 
A)  Large values of alpha (α) place more emphasis on recent data. 
B)  α values range from 0.6 to 1. 
C)  Smaller values of smoothing constant have the advantage of quickly adjusting the forecasts when forecasting errors occur. 
D)  Larger values of smoothing constant do not allow the forecast to react faster to changing conditions.

Question 6

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
 $$\begin{array} { | c | c | } 
\hline \text { Year } & \text { Sales } \
\hline 1 & 6 \
\hline 2 & 9 \
\hline 3 & 13 \
\hline 4 & 15 \
\hline 5 & 20 \
\hline
\end{array}$$
-Regression analysis:

Accepted Answer

A)  is limited to one dependent and one independent variable. 
B)  is best with nonlinear relationships. 
C)  maximizes the sum of the squared deviations between the actual time-series value and the estimated values of the dependent variable. 
D)  can be used with time as the independent variable. 
A)  is limited to one dependent and one independent variable. 
B)  is best with nonlinear relationships. 
C)  maximizes the sum of the squared deviations between the actual time-series value and the estimated values of the dependent variable. 
D)  can be used with time as the independent variable.

Question 7

Using the sales data on a particular model of a DVD player shown below in Table 2, answer questions 
Table 2
 $\begin{array}{|l|c|c|c|}
\hline \text { Month } & \text { Sales } & \text { Forecast 1 } & \text { Forecast 2 } \
\hline \text { Jan } & 35 & 30 & 33 \
\hline \text { Feb } & 29 & 28 & 32 \
\hline \text { Mar } & 39 & 43 & 35 \
\hline \text { Apr } & 42 & 40 & 45 \
\hline \text { May } & 51 & 48 & 52 \
\hline \text { Jun } & 56 & 55 & 52 \
\hline
\end{array}$
-For the data in Table 2, which forecast is better using the mean absolute deviation (MAD) criterion given in the answer #11 and #12?

Accepted Answer

A)  Forecast 1 
B)  Forecast 2 
C)  Forecast 1 and 2 are identical, with equal MADs 
D)  Neither forecast 1 nor forecast 2 
A)  Forecast 1 
B)  Forecast 2 
C)  Forecast 1 and 2 are identical, with equal MADs 
D)  Neither forecast 1 nor forecast 2

Question 8

Explain how forecasting is used at different levels of an organization.

Accepted Answer

Top managers need long-range forecasts e

Question 9

Define forecast error and describe its metrics.

Accepted Answer

Forecast error is the difference between

Question 10

The values of mean absolute deviation (MAD) and mean square error (MSE) depend on the measurement scale of the time-series data.

Accepted Answer

A) True 
 B)False

Question 11

Statistical forecasting is based upon the assumption that the future will be an extrapolation of the past.

Accepted Answer

A) True 
 B)False

Question 12

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
 $$\begin{array} { | l | c | c | c | c | } 
\hline \text { Week } & 1 & 2 & 3 & 4 \
\hline \text { Sales } & 112 & 105 & 125 & 118 \
\hline
\end{array}$$
-The four-period moving average for next week (week 5) is:

Accepted Answer

A)  less than or equal to 100. 
B)  more than 100 but less than or equal to 110. 
C)  more than 110 but less than or equal to 120. 
D)  more than 120 but less than or equal to 130. 
A)  less than or equal to 100. 
B)  more than 100 but less than or equal to 110. 
C)  more than 110 but less than or equal to 120. 
D)  more than 120 but less than or equal to 130.

Question 13

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 = 59407 + 509 (Week) + 16463 (Price/gallon)
a.Interpret the coefficients of the independent variables in this model.
b.What is the sales forecast for the 12th week of the summer if the price per gallon is estimated to be $3.00?

Accepted Answer

a.Sales increase on average by 509 gallo

Question 14

A group of international experts published a set of principles of forecasting that includes all of the following EXCEPT:

Accepted Answer

A)  use quantitative rather than qualitative methods. 
B)  combine forecasts from approaches that are similar. 
C)  ask experts to justify their forecasts in writing. 
D)  use multiple measures of forecast accuracy. 
A)  use quantitative rather than qualitative methods. 
B)  combine forecasts from approaches that are similar. 
C)  ask experts to justify their forecasts in writing. 
D)  use multiple measures of forecast accuracy.

Question 15

A long-range forecast typically covers a planning horizon of 3 to 12 months.

Accepted Answer

A) True 
 B)False

Long-range forecasts expressed in sales dollars are more meaningful to top managers than to managers at the operations level.

Which of the following statement is TRUE if the time series exhibits a negative trend in an exponential smoothing technique?

Irregular variation and random variation both refer to unexplainable deviation of a time series from a predictable pattern.

Better operational decisions can be made by integrating forecasting with value chain and capacity management systems.

Which of the following statements is TRUE about single exponential smoothing?

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 -Regression analysis:

Explain how forecasting is used at different levels of an organization.

Define forecast error and describe its metrics.

The values of mean absolute deviation (MAD) and mean square error (MSE) depend on the measurement scale of the time-series data.

Statistical forecasting is based upon the assumption that the future will be an extrapolation of the past.

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 four-period moving average for next week (week 5) is:

A group of international experts published a set of principles of forecasting that includes all of the following EXCEPT:

A long-range forecast typically covers a planning horizon of 3 to 12 months.

Goods, Services, and Operations Management

Value Chains

Measuring Performance in Operations

Operations Strategy

Technology and Operations Management

Goods and Service Design

Process Selection, Design, and Analysis

Facility and Work Designs

Supply Chain Design

Capacity Management

Managing Inventories

Resource Management

Operations Scheduling and Sequencing

Quality Management

Appendix: Quality Management

Quality Control and Spc

Appendix: Queuing Analysis

Appendix: Modeling Using Linear Programming

Lean Operating Systems

Appendix: Simulation

Project Management

Appendix: Decision Analysis

Filters

Exam 11: Forecasting and Demand Planning

Long-range forecasts expressed in sales dollars are more meaningful to top managers than to managers at the operations level.

Which of the following statement is TRUE if the time series exhibits a negative trend in an exponential smoothing technique?

Irregular variation and random variation both refer to unexplainable deviation of a time series from a predictable pattern.

Better operational decisions can be made by integrating forecasting with value chain and capacity management systems.

Which of the following statements is TRUE about single exponential smoothing?

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 -Regression analysis:

Explain how forecasting is used at different levels of an organization.

Define forecast error and describe its metrics.

The values of mean absolute deviation (MAD) and mean square error (MSE) depend on the measurement scale of the time-series data.

Statistical forecasting is based upon the assumption that the future will be an extrapolation of the past.

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 four-period moving average for next week (week 5) is:

A group of international experts published a set of principles of forecasting that includes all of the following EXCEPT:

A long-range forecast typically covers a planning horizon of 3 to 12 months.

Goods, Services, and Operations Management

Value Chains

Measuring Performance in Operations

Operations Strategy

Technology and Operations Management

Goods and Service Design

Process Selection, Design, and Analysis

Facility and Work Designs

Supply Chain Design

Capacity Management

Managing Inventories

Resource Management

Operations Scheduling and Sequencing

Quality Management

Appendix: Quality Management

Quality Control and Spc

Appendix: Queuing Analysis

Appendix: Modeling Using Linear Programming

Lean Operating Systems

Appendix: Simulation

Project Management

Appendix: Decision Analysis

Filters