Question 1

Which one of the following statements is TRUE?

Accepted Answer

A) The ideal of zero bias and zero MAD can be accomplished by systematically searching for the best values of the smoothing constants. 
B) Bias is always less than MAD. 
C) For projections of more stable demand patterns without trends,seasonal influences,or cyclical influences,use larger values of n in the simple moving average approach. 
D) Getting a single forecast of 500 units for the month of July is better than getting a forecast that there is a 95 percent chance that demand for July will be between 450 and 550 units. 
A) The ideal of zero bias and zero MAD can be accomplished by systematically searching for the best values of the smoothing constants. 
B) Bias is always less than MAD. 
C) For projections of more stable demand patterns without trends,seasonal influences,or cyclical influences,use larger values of n in the simple moving average approach. 
D) Getting a single forecast of 500 units for the month of July is better than getting a forecast that there is a 95 percent chance that demand for July will be between 450 and 550 units.

Question 2

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

Accepted Answer

A) a simple moving average forecast with n = 20 should outperform a simple moving average forecast with n = 3. 
B) a simple moving average forecast with n = 3 should outperform a simple moving average forecast with n = 20. 
C) a simple moving average forecast with n = 20 should perform about the same as a simple moving average forecast with n = 3. 
D) an exponential smoothing forecast with alpha = 0.30 should outperform a exponential smoothing forecast with alpha = 0.01. 
A) a simple moving average forecast with n = 20 should outperform a simple moving average forecast with n = 3. 
B) a simple moving average forecast with n = 3 should outperform a simple moving average forecast with n = 20. 
C) a simple moving average forecast with n = 20 should perform about the same as a simple moving average forecast with n = 3. 
D) an exponential smoothing forecast with alpha = 0.30 should outperform a exponential smoothing forecast with alpha = 0.01.

Question 3

Sales force estimates are extremely useful for technological forecasting.

Accepted Answer

A) True 
 B)False

Question 4

Promotional campaigns are designed to increase sales with creative pricing.

Accepted Answer

A) True 
 B)False

Question 5

________ is a method for incorporating a trend in an exponentially smoothed forecast.

Accepted Answer

Trend-adju

Question 6

________ is a forecasting method in which the opinions,experience,and technical knowledge of one or more managers are summarized to arrive at a single forecast.

Accepted Answer

The answer of ________ is a forecasting method in which...

Question 7

Which one of the following is an example of a time series forecasting technique?

Accepted Answer

A) survey analysis 
B) Delphi method 
C) trend-adjusted exponential smoothing 
D) market research 
A) survey analysis 
B) Delphi method 
C) trend-adjusted exponential smoothing 
D) market research

Question 8

One of the basic time series patterns is trend.

Accepted Answer

A) True 
 B)False

Question 9

Table 10.9
  
-Use the information in Table 10.9.What is the cumulative sum of forecast errors for the data?

Accepted Answer

A) 0 units 
B) greater than 0,but less than or equal to 25 units 
C) greater than 25,but less than or equal to 50 units 
D) greater than 50 units 
A) 0 units 
B) greater than 0,but less than or equal to 25 units 
C) greater than 25,but less than or equal to 50 units 
D) greater than 50 units

Question 10

Table 10.1
  
-Use the information in Table 10.1.Your boss has asked you to find a good technique to forecast short-term demand for an important product.You have decided to test the following four techniques against the historical data already given: ∙ Three-month simple moving average
∙ Three-month weighted moving average,with weight of 0.6 for the most recent month,0.3 for the second-most-recent month,and 0.1 for the third-most-recent month
∙ Three-month weighted moving average,with weights of 0.5 for the most recent month,0.3 for the second-most-recent month,and 0.2 for the third-most-recent month
∙ Exponential smoothing (a = 0.3 and the forecast for March was 55)
Use each of the four techniques to forecast April through August,and then use the five months of forecasts to calculate MAD.Round all forecasts to the nearest whole number just before doing your MAD calculations.Which of the four techniques is best in terms of MAD?

Accepted Answer

A) three-month simple moving average 
B) three-month weighted moving average (0.6,0.3,0.1) 
C) three-month weighted moving average (0.5,0.3,0.2) 
D) exponential smoothing (a = 0.3) 
A) three-month simple moving average 
B) three-month weighted moving average (0.6,0.3,0.1) 
C) three-month weighted moving average (0.5,0.3,0.2) 
D) exponential smoothing (a = 0.3)

Question 11

Combination forecasting is a method of forecasting that selects the best forecast from a group of forecasts generated by simple techniques.

Accepted Answer

A) True 
 B)False

Question 12

The repeated observations of demand for a product or service in their order of occurrence form a pattern known as a time series.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an example of a judgmental forecasting technique?

Accepted Answer

A) market research 
B) multiplicative seasonal method 
C) simple moving average 
D) linear regression 
A) market research 
B) multiplicative seasonal method 
C) simple moving average 
D) linear regression

Question 14

________ is a time-series method used to estimate the average of a demand time series by averaging the demand for the n most recent time periods.

Accepted Answer

Simple mov

Question 15

When the underlying mean of a time series changes frequently but there is no trend,cyclical,or seasonal influence,

Accepted Answer

A) a simple moving average forecast with n = 20 should outperform a simple moving average forecast with n = 3. 
B) a simple moving average forecast with n = 3 should outperform a simple moving average forecast with n = 20. 
C) a simple moving average forecast with n = 20 should perform about the same as a simple moving average forecast with n = 3. 
D) an exponential smoothing forecast with alpha = 0.01 should outperform a exponential smoothing forecast with alpha = 0.30. 
A) a simple moving average forecast with n = 20 should outperform a simple moving average forecast with n = 3. 
B) a simple moving average forecast with n = 3 should outperform a simple moving average forecast with n = 20. 
C) a simple moving average forecast with n = 20 should perform about the same as a simple moving average forecast with n = 3. 
D) an exponential smoothing forecast with alpha = 0.01 should outperform a exponential smoothing forecast with alpha = 0.30.

Question 16

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

Accepted Answer

A) The five basic patterns of most business demand series are the horizontal,trend,seasonal,cyclical,and random. 
B) Estimating cyclical movement is difficult.Forecasters do not know the duration of the cycle because they cannot predict the events that cause it. 
C) The trend,over an extended period of time,always increases the average level of the series. 
D) Every demand series has at least the following two components: horizontal and random. 
A) The five basic patterns of most business demand series are the horizontal,trend,seasonal,cyclical,and random. 
B) Estimating cyclical movement is difficult.Forecasters do not know the duration of the cycle because they cannot predict the events that cause it. 
C) The trend,over an extended period of time,always increases the average level of the series. 
D) Every demand series has at least the following two components: horizontal and random.

Question 17

With the multiplicative seasonal method of forecasting,

Accepted Answer

A) the times series cannot exhibit a trend. 
B) seasonal factors are multiplied by an estimate of average demand to arrive at a seasonal forecast. 
C) the seasonal amplitude is a constant,regardless of the magnitude of average demand. 
D) there can only be four seasons in the time series data. 
A) the times series cannot exhibit a trend. 
B) seasonal factors are multiplied by an estimate of average demand to arrive at a seasonal forecast. 
C) the seasonal amplitude is a constant,regardless of the magnitude of average demand. 
D) there can only be four seasons in the time series data.

Question 18

Doctors,dentists,lawyers,and automobile repair shops are examples of service providers that use appointment systems.

Accepted Answer

A) True 
 B)False

Question 19

Some analysts prefer to use a holdout set as the final test of a forecasting procedure.

Accepted Answer

A) True 
 B)False

Question 20

Table 10.8
A manager wants to forecast the monthly demand
for a machine the company produces.
  
-Use the information in Table 10.8.Forecast the demand for the machine for month 7,using the three-month moving average method.

Accepted Answer

A) less than or equal to 56 
B) greater than 56 but less than or equal to 58 
C) greater than 58 but less than or equal to 61 
D) greater than 61 
A) less than or equal to 56 
B) greater than 56 but less than or equal to 58 
C) greater than 58 but less than or equal to 61 
D) greater than 61

Exam 10: Managing Demand and Forecasting

Which one of the following statements is TRUE?

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

Sales force estimates are extremely useful for technological forecasting.

Promotional campaigns are designed to increase sales with creative pricing.

________ is a method for incorporating a trend in an exponentially smoothed forecast.

________ is a forecasting method in which the opinions,experience,and technical knowledge of one or more managers are summarized to arrive at a single forecast.

Which one of the following is an example of a time series forecasting technique?

One of the basic time series patterns is trend.

Table 10.9 -Use the information in Table 10.9.What is the cumulative sum of forecast errors for the data?

Combination forecasting is a method of forecasting that selects the best forecast from a group of forecasts generated by simple techniques.

The repeated observations of demand for a product or service in their order of occurrence form a pattern known as a time series.

Which of the following is an example of a judgmental forecasting technique?

________ is a time-series method used to estimate the average of a demand time series by averaging the demand for the n most recent time periods.

When the underlying mean of a time series changes frequently but there is no trend,cyclical,or seasonal influence,

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

With the multiplicative seasonal method of forecasting,

Doctors,dentists,lawyers,and automobile repair shops are examples of service providers that use appointment systems.

Some analysts prefer to use a holdout set as the final test of a forecasting procedure.

Table 10.8 A manager wants to forecast the monthly demand for a machine the company produces. -Use the information in Table 10.8.Forecast the demand for the machine for month 7,using the three-month moving average method.

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