Question 1

A skeptical manager asks what long-range forecasts can be used for.Give her three possible uses/purposes.

Accepted Answer

Any three of: planning new products,capital expenditures,facility location or expansion,research and development.

Question 2

Given the following data,calculate the three-year moving averages for years 4 through 10.

Accepted Answer

The answer of Given the following data,calculate the three-year moving...

Question 3

When one constant is used to smooth the forecast average and a second constant is used to smooth the trend,the forecasting method is ________.

Accepted Answer

exponential smoothing with trend adjustment or trend-adjusted smoothing or second-order smoothing or double smoothing

Question 4

Jim's department at a local department store has tracked the sales of a product over the last ten weeks.Forecast demand using exponential smoothing with an alpha of 0.4,and an initial forecast of 28.0 for period 1.Calculate the MAD.What do you recommend?

Accepted Answer

@#IMG-DLM& The tracking signal RSFE/MAD

Question 5

Demand for a certain product is forecast to be 800 units per month,averaged over all 12 months of the year.The product follows a seasonal pattern,for which the January monthly index is 1.25.What is the seasonally-adjusted sales forecast for January?

Accepted Answer

A) 640 units 
B) 798.75 units 
C) 801.25 units 
D) 1000 units 
E) 88.33 units 
A) 640 units 
B) 798.75 units 
C) 801.25 units 
D) 1000 units 
E) 88.33 units

Question 6

Identify three advantages of the moving average forecasting model.Identify three disadvantages of the moving average forecasting model.

Accepted Answer

Three advantages of the model are that i

Question 7

Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast?

Accepted Answer

A) 0 
B) 1 divided by the number of periods 
C) 0.5 
D) 1.0 
E) cannot be determined 
A) 0 
B) 1 divided by the number of periods 
C) 0.5 
D) 1.0 
E) cannot be determined

Question 8

The last seven weeks of demand at a new car dealer are shown below.Use a three-period weighted-moving average to determine a forecast for the 8th week using weights of 1,2,and 3.Calculate the MAD for this forecast.What does the MAD indicate?
Week Sales
1 25
2 30
3 27
4 31
5 27
6 29
7 30

Accepted Answer

Week Sales 3WMA |error|
1 25
2

Question 9

Explain the role of regression models (time series and otherwise)in forecasting.That is,how is trend projection able to forecast? How is regression used for causal forecasting?

Accepted Answer

For trend projection,the independent var

Question 10

Which of the following values of alpha would cause exponential smoothing to respond the most slowly to forecast errors?

Accepted Answer

A) 0.10 
B) 0.20 
C) 0.40 
D) 0.80 
E) cannot be determined 
A) 0.10 
B) 0.20 
C) 0.40 
D) 0.80 
E) cannot be determined

Question 11

A six-month moving average forecast is generally better than a three-month moving average forecast if demand

Accepted Answer

A) is rather stable. 
B) has been changing due to recent promotional efforts. 
C) follows a downward trend. 
D) exceeds one million units per year. 
E) follows an upward trend. 
A) is rather stable. 
B) has been changing due to recent promotional efforts. 
C) follows a downward trend. 
D) exceeds one million units per year. 
E) follows an upward trend.

Question 12

Identify the seven steps involved in forecasting.

Accepted Answer

1.Determine the use of the forecast.
2.S

Question 13

Compare seasonal effects and cyclical effects.

Accepted Answer

A cycle is longer (typically s

Question 14

Marie Bain is the production manager at a company that manufactures hot water heaters.Marie needs a demand forecast for the next few years to help decide whether to add new production capacity.The company's sales history (in thousands of units)is shown in the table below.Use exponential smoothing with trend adjustment,to forecast demand for period 6.The initial forecast for period 1 was 11 units;the initial estimate of trend was 0.The smoothing constants are α = .3 and β = .3.

Accepted Answer

The answer of Marie Bain is the production manager at...

Question 15

Given an actual demand of 61,a previous forecast of 58,and an alpha of .3,what would the forecast for the next period be using simple exponential smoothing?

Accepted Answer

A) 45.5 
B) 57.1 
C) 58.9 
D) 61.0 
E) 65.5 
A) 45.5 
B) 57.1 
C) 58.9 
D) 61.0 
E) 65.5

Question 16

The last four months of sales were 8,10,15,and 9 units.The last four forecasts were 5,6,11,and 12 units.The Mean Absolute Deviation (MAD)is

Accepted Answer

A) 2. 
B) -10. 
C) 3.5. 
D) 9. 
E) 10.5. 
A) 2. 
B) -10. 
C) 3.5. 
D) 9. 
E) 10.5.

Question 17

A fundamental distinction between trend projection and linear regression is that

Accepted Answer

A) trend projection uses least squares while linear regression does not. 
B) only linear regression can have a negative slope. 
C) in trend projection the independent variable is time;in linear regression the independent variable need not be time,but can be any variable with explanatory power. 
D) trend projection can be a function of several variables,while linear regression can only be a function of one variable. 
E) trend projection uses two smoothing constants,not just one. 
A) trend projection uses least squares while linear regression does not. 
B) only linear regression can have a negative slope. 
C) in trend projection the independent variable is time;in linear regression the independent variable need not be time,but can be any variable with explanatory power. 
D) trend projection can be a function of several variables,while linear regression can only be a function of one variable. 
E) trend projection uses two smoothing constants,not just one.

Question 18

A time-series model uses a series of past data points to make the forecast.

Accepted Answer

A) True 
 B)False

Question 19

________ are useful if we can assume that market demands will stay fairly steady over time.

Accepted Answer

The answer of ________ are useful if we can assume...

Question 20

In trend projection,a negative regression slope is mathematically impossible.

Accepted Answer

A) True 
 B)False

Exam 4: Forecasting

A skeptical manager asks what long-range forecasts can be used for.Give her three possible uses/purposes.

Given the following data,calculate the three-year moving averages for years 4 through 10.

When one constant is used to smooth the forecast average and a second constant is used to smooth the trend,the forecasting method is ________.

Jim's department at a local department store has tracked the sales of a product over the last ten weeks.Forecast demand using exponential smoothing with an alpha of 0.4,and an initial forecast of 28.0 for period 1.Calculate the MAD.What do you recommend?

Demand for a certain product is forecast to be 800 units per month,averaged over all 12 months of the year.The product follows a seasonal pattern,for which the January monthly index is 1.25.What is the seasonally-adjusted sales forecast for January?

Identify three advantages of the moving average forecasting model.Identify three disadvantages of the moving average forecasting model.

Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast?

The last seven weeks of demand at a new car dealer are shown below.Use a three-period weighted-moving average to determine a forecast for the 8th week using weights of 1,2,and 3.Calculate the MAD for this forecast.What does the MAD indicate? Week Sales 1 25 2 30 3 27 4 31 5 27 6 29 7 30

Explain the role of regression models (time series and otherwise)in forecasting.That is,how is trend projection able to forecast? How is regression used for causal forecasting?

Which of the following values of alpha would cause exponential smoothing to respond the most slowly to forecast errors?

A six-month moving average forecast is generally better than a three-month moving average forecast if demand

Identify the seven steps involved in forecasting.

Compare seasonal effects and cyclical effects.

Given an actual demand of 61,a previous forecast of 58,and an alpha of .3,what would the forecast for the next period be using simple exponential smoothing?

The last four months of sales were 8,10,15,and 9 units.The last four forecasts were 5,6,11,and 12 units.The Mean Absolute Deviation (MAD)is

A fundamental distinction between trend projection and linear regression is that

A time-series model uses a series of past data points to make the forecast.

________ are useful if we can assume that market demands will stay fairly steady over time.

In trend projection,a negative regression slope is mathematically impossible.

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