Deck 5: Forecasting

Question 1

A 7-day moving average will be more responsive than a 3-day moving average.

Answer 1

False

Question 2

The benefit of a weighted moving average is that it allows a greater emphasis on the past demand than most recent periods.

Answer 2

False

Question 3

A naïve forecast considers several periods of past data in creating a forecast.

Answer 3

False

Question 4

In exponential smoothing,a small value of alpha will produce a more responsive forecast than a large alpha value.

Question 5

Using many periods of data in a moving average will produce a more stable forecast than using three or four periods.

Question 6

Cyclical factors are similar to seasonal factors,but have a much longer time period than seasonal factors.

Question 7

A moving average filters out the effects of random variation.

Question 8

Seasonal demand is measured in time periods of less than a year.

Question 9

Random variation is caused by chance events after all other components of demand have been accounted for in the forecast.

Question 10

Seasonal patterns can be exhibited over a quarter,a week,or in hours.

Question 11

Preparing an accurate forecast for an aggregated group of similar products is often easier than forecasting for an individual product separately.

Question 12

Weighted moving average and exponential smoothing both account for trends in the data being forecasted.

Question 13

Fashion and economic conditions produce cycles.

Question 14

Forecasting becomes more difficult the farther a forecast looks into the future.

Question 15

A time-series analysis considers cycles,trends,and seasonal variation to construct forecasts.

Question 16

Sophisticated forecasting models using massive computing power allow companies to produce exact forecasts.

Question 17

Companies must have perfect forecasts for planning purposes.

Question 18

Forecasting methods should be used for products with dependent demand.

Question 19

Quantitative techniques for forecasting are based on subjective factors,estimates,and opinions.

Question 20

The naïve forecast for the next period is the actual value observed in the current period.

Question 21

The forecast error for a period is just the actual demand for the period plus the forecast for the period.

Question 22

Innovative products are generally more difficult to forecast than stable products.

Question 23

Decomposition of data involves separating historical data into components.

Question 24

Which value does a naïve forecast use to forecast the next period?

A)An average of the last 3 periods
B)An average of the last 7 periods
C)A weighted average of the last 3 periods
D)The previous forecasted value
E)The current actual value

Question 25

For which of the following would a forecast not be the best method for determining the needed information?

A)Planning the number of production or service facilities needed
B)Determining staffing allocations
C)Determining the number of screws needed to mass produce chairs
D)Planning capacity requirements
E)Determining how many hours of production are needed to meet demand

Question 26

A forecast should maximize forecast error.

Question 27

Which of the following is not a component of demand?

A)Trend
B)Seasonal component
C)Cyclical component
D)Depreciation
E)Random variation

Question 28

The mean absolute percentage error is useful because it presents errors as a percentage and makes it easy to compare forecasts from two different datasets.

Question 29

With a moving average,what will be the result of using a 3-day moving average instead of a 12-day moving average?

A)A more responsive forecast
B)A smoothed forecast
C)A less reactive forecast
D)A more stable forecast
E)An unequally weighted forecast

Question 30

Cyclical factors are most similar to what component of demand?

A)Seasonal factors
B)Average demand
C)Trend
D)Autocorrelation
E)Variance

Question 31

Radio frequency identification has no additional advantages over bar codes.

Question 32

Which of the following statements generally describe forecasts?

A)Sophisticated forecasting packages produce exact forecasts.
B)Forecasts get worse the farther into the future they go.
C)Individual products are easier to forecast than aggregated products.
D)Forecasts should be used for products with dependent demand.
E)Business forecasts are generally correct.

Question 33

Which are the two basic types of forecasting?

A)Quantitative and qualitative
B)Subjective and correlated
C)Causal and reflective
D)Time series and naïve
E)Averaging and regression

Question 34

One of the most common causal models is linear regression.

Question 35

In a 5-period weighted moving average forecast for period t + 1,which period will have the most weight?

A)Period t
B)Period t - 1
C)Period t - 2
D)Period t - 3
E)Period t - 4

Question 36

The correlation coefficient is the square root of the coefficient of determination.

Question 37

Cyclical factors for demand include all of the following except

A)Fashion cycles
B)Political cycles
C)Economic cycles
D)Sociocultural cycles
E)Lunar cycles

Question 38

Linear regression models can only include one independent variable.

Question 39

The mean squared error is the best tool for measuring forecast error.

Question 40

Which of the following alpha values will have the most responsive forecast?

A)0
B)0.2
C)0.4
D)0.6
E)0.8

Question 41

Identify four basic principles of forecasting.

Question 42

What term describes demand that is characterized by regular repletion of increases or decreases in demand as measured in time periods of less than a year?

A)Seasonality
B)Exponential
C)Trend
D)Autocorrelation
E)Variance

Question 43

What acronym describes the technology that utilizes an integrated circuit and a tag antenna to transmit and record information on a product?

A)RFID
B)CPFR
C)MAPE
D)MSE
E)QFD

Question 44

The difference between the forecast and actual demand for a given period is described by what term?

A)Forecast error
B)Real demand
C)Forecast demand
D)Bias error
E)Random error

Question 45

Which of the following types of products have a relatively unpredictable demand and are difficult to forecast?

A)Mature products
B)Products with many substitutes
C)Innovative products
D)Dead products
E)Declining products

Question 46

This value can range between -1 and 1.

A)Correlation coefficient
B)Coefficient of determination
C)Standard error
D)Predictor equation slope coefficient
E)Type 1 error

Question 47

Identify a product or service that experiences daily,weekly,and monthly seasonal demand.

Question 48

Which of the following is not a qualitative method?

A)Market research
B)Delphi method
C)Causal methods
D)Sales force planning
E)All are qualitative methods

Question 49

All of the following assume no trend in data except

A)Naïve forecast
B)Moving average
C)Weighted moving average
D)Exponential smoothing
E)Linear regression

Question 50

This term refers to the statistic that measures the amount of variation in the dependent variable that the regression line explains.

A)Correlation coefficient
B)Coefficient of determination
C)Standard error
D)Predictor equation slope coefficient
E)Type I error

Question 51

Identify the six basic components of demand.

Question 52

Briefly explain what effect including more periods will have on a moving average.

Question 53

When the seasonal index value is 1,what is the interpretation of the value?

A)Seasonality increases demand in this period.
B)Seasonality has no effect on demand in this period.
C)Seasonality decreases demand in this period.
D)Seasonality increases demand by 1 unit.
E)Seasonality decreases demand by 1 unit.

Question 54

In the exponential smoothing model,what is the effect of the size of alpha on the forecast?

Question 55

A seasonal index for a given month is computed by dividing each month's demand by what?

A)The previous month's demand
B)The next month's demand
C)The average annual demand
D)The slope of the trend line
E)The value for the month from a year ago

Question 56

Forecasts based on averages generally have what relation to actual demand?

A)The forecast mirrors demand.
B)The forecast leads demand.
C)The forecast lags demand.
D)The forecast exaggerates forecast error.
E)The forecast exaggerates variation.

Question 57

The better method for comparing two different data sets is what measure of error?

A)CFE
B)MSE
C)MAD
D)QFD
E)MAPE

Question 58

Which of the following is not a common method for influencing seasonality?

A)Extend the selling season
B)Advertising after the peak season
C)Discounting during the low-demand periods
D)Special promotions during nonpeak periods
E)Making complementary products

Question 59

Which of the following is a causal method for forecasting?

A)Moving average
B)Naïve method
C)Linear regression
D)MSE
E)Delphi method

Question 60

Which of the following is not a measure of forecast error?

A)CFE
B)MSE
C)MAD
D)QFD
E)MAPE

Question 61

The local university's student weight room recorded the number of visitors over the previous 5 days.
What would a 3-day moving average forecast be for the 6th day?

Question 62

For the following data showing actual demand and forecasted demand for each quarter,calculate the MAPE.

Question 63

Develop seasonal indices for each quarter for the following demand data:

Question 64

The local university's student weight room recorded the number of visitors over the previous 5 days.
What would a 3-day weighted moving average forecast be for the 6th day using a weight of 0.6 for the most recent period,0.3 for the second most recent period,and 0.1 for the third most recent period?

Question 65

For the following data showing actual demand and forecasted demand for each quarter,calculate the MSE.

Question 66

The local university's student weight room recorded the number of visitors over the previous 5 days.

Question 67

If the forecast for the first quarter for next year is 1000 units,what is the seasonally adjusted demand if the first quarter seasonal index is 1.24?

Question 68

For the following data showing actual demand and forecasted demand for each quarter,calculate the MAD.

Question 69

Why would someone select a causal model over time series or qualitative models for forecasting?

Question 70

Generally describe methods that utilize qualitative data for forecasting,and give three examples of qualitative techniques.

Question 71

Describe yield management and give an example of it.

Question 72

What is the forecast in period 2 for a product that has experienced several months of sales growth that is expected to continue? The actual demand in period 1 was 27,000 units.Use 0.3 for the smoothing parameter for the average and 0.2 for the smoothing parameter of the trend.The exponentially smoothed average of the trend for the previous period was 1500.The exponentially smoothed average of the series in the previous period was 25,000 units.

Question 73

Describe r,r²,and the standard error of the estimate.

Question 74

Identify two advantages and two disadvantages of sales force planning.

Question 75

The local university's student weight room recorded the number of visitors over the previous 5 days.
What would a naïve forecast be for the 6th day?