Exam 15: Forecasting

Consider the following demand and forecast. Period Demand Forecast 1 7 10 2 12 15 3 18 20 4 22 If MAD = 2 for the four periods under consideration, what is the forecast for period 4?

A(n) ________ forecast encompasses the immediate future, is concerned with daily activities of the firm and does not go beyond one or two months in to the future.

Data cannot exhibit both trend and cyclical patterns.

In a weighted moving average, weights must sum to 1.

Recent past demand for product ZXT is given in the following table. Month Actual Demand February 20 March 22 April 33 May 35 June 31 July 48 August 41 -Determine the forecasted demand for April and May based on adjusted exponential smoothing with α = .2, β = .3, a February forecast of 20, and T=0.

________ error is the sum of the forecast errors.

Qualitative methods use management judgment, expertise, and opinion to make forecasts.

A seasonal pattern is an up-and-down repetitive movement within a trend occurring periodically.

Regression methods attempt to develop a mathematical relationship between the item being forecast and factors that cause it to behave the way it does.

The following data represents quarterly sales of lawnmowers. Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 1 150 140 190 165 2 160 148 210 175 -What is the seasonal index for the third quarter? (Round to the nearest hundredth.)

Time series is a category of statistical techniques that uses historical data to predict future behavior.

Given the following data on the number of pints of ice cream sold at a local ice cream store for a 6-period time frame: Period Demand 1 200 2 245 3 190 4 270 5 280 6 300 -Compute a 3-period moving average for period 4.

The following data summarizes the historical demand for a product. Month Actual Demand March 20 April 25 May 40 Tune 35 Tuly 30 August 45 Use exponential smoothing with α = .2 and a smoothed forecast for July of 32 to determine August and September's smoothed forecasts.

Seasonal patterns are observed only during the four seasons - winter, spring, summer, and fall.

Knowledgeable individuals bring their opinions to bear in ________, a qualitative method of forecasting.

Adjusted exponential smoothing is an exponential smoothing forecast adjusted for seasonality.

Irregular variations exhibit no pattern.

Sally has been running the following number of ads in the local newspaper to help attract customers into her store. She has also been keeping track of customers who have come into the store as a result of the ads, as well as the amount of money they spend. This is the data from the last 4 weeks: Number of ads Increased sales 16 330 12 270 18 380 14 300 -If Sally runs 10 ads, how much will sales increase?

Exponential smoothing forecasts are more sensitive or reactive to the changes in demand as the value of the smoothing constant, α, ________.

The following sales data are available for 2003-2008: Year Sales Forecast 2003 7 9 2004 12 10 2005 14 15 2006 20 22 2007 16 18 2008 25 21 Calculate the average error.