Deck 15: Forecasting

Question 1

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

Answer 1

False

Question 2

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

Answer 2

True

Question 3

Shorter-period moving averages react more slowly to recent demand changes than do longer-period moving averages.

Answer 3

False

Question 4

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

Question 5

Moving averages are good for stable demand with no pronounced behavioral patterns.

Question 6

The basic types of forecasting methods include time series, regression, and qualitative methods.

Question 7

Longer-period moving averages react more slowly to recent demand changes than do shorter-period moving averages.

Question 8

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

Question 9

Random variations are movements that are not predictable and follow no pattern.

Question 10

Time series methods assume that what has occurred in the past will continue to occur in the future.

Question 11

A trend is a gradual, long-term, up-or-down movement of demand.

Question 12

Irregular variations exhibit no pattern.

Question 13

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

Question 14

Technological forecasting helps determine the technological feasibility of new products by surveying large numbers of consumers.

Question 15

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

Question 16

The Delphi method develops a consensus forecast about what will occur in the future.

Question 17

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

Question 18

Qualitative methods are the least common type of forecasting method for the long-term strategic planning process.

Question 19

A cycle is an up-or-down movement in demand that repeats itself in less than 1 year.

Question 20

Data cannot exhibit both trend and cyclical patterns.

Question 21

If average forecast error is positive, it indicates that the forecast is biased high.

Question 22

A(n) ________ is an up-and-down repetitive movement within a trend occurring periodically.

Question 23

Daily operations are assisted by ________-range forecasting

Question 24

In the regression equation y=a+bx, the slope of the equation is x.

Question 25

The dependent variable in linear regression is usually designated as the x variable.

Question 26

Regression is used to relate one variable to one or more variables.

Question 27

A(n) ________ forecast typically encompass a period longer than one year.

Question 28

One problem with multiple regression is ________, which is a measure of the amount of "overlapping" information about the dependent variable that's provided by several independent variables.

Question 29

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

Question 30

A long-term wave in a demand pattern that undulates gracefully over a period of greater than a year is a(n) ________.

Question 31

The major types of forecasting methods are ________, ________, and ________.

Question 32

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

Question 33

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.

Question 34

________ relates demand to two or more independent variables.

Question 35

Correlation measures the strength of relationship between the x and y variables and the closer it is to 1 or -1, the greater the proof that the level of x determines the level of y.

Question 36

________ error is the sum of the forecast errors.

Question 37

Unpredictable movements in demand that follow no pattern are ________.

Question 38

The coefficient of determination provides a measure of how the level of the independent variable in a regression equation explains the level of the dependent variable in the equation.

Question 39

________ is a gradual, long-term, upward or downward movement of demand.

Question 40

The closer the value of α is to zero, the ________ will be the dampening or smoothing effect.

Question 41

Daily highs in Sacramento for the past week (from least to most recent) were:
95, 102, 101, 96, 95, 90 and 92. Develop a forecast for today using a 2-day moving average.

Question 42

Using the exponential smoothing factor 0.3, how many check-ins can be forecasted for January? Assume the forecast for December was 122 rooms.

Question 43

Longer-period moving averages react more ________ to recent demand changes than do shorter period moving averages.

Question 44

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:

Compute a 5-period moving average for period 6.

Question 45

The ________ is the sum of the absolute value of forecasting errors divided by the number of periods in which a forecast was made.

Question 46

MAPD measures ________.

Question 47

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:

Compute a 3-period moving average for period 6.

Question 48

Using a 3-month moving average, how many check-ins can be forecasted for January?

Question 49

Daily highs in Sacramento for the past week (from least to most recent) were:
95, 102, 101, 96, 95, 90 and 92. Develop a forecast for today using a 3-day moving average.

Question 50

________ measures the strength of the relationship between two variables.

Question 51

The ________ is the percentage of variation in the dependent variable that results from the independent variable.

Question 52

Given the following data on hotel check-ins for a 6-month period:

July:     70 rooms
August:     105 rooms
September:     90 rooms
October:     120 rooms
November:    110 rooms
December:     115 rooms



-What is the 3-month moving average forecast for January?

Question 53

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:

Compute a 3-period moving average for period 4.

Question 54

________ are the movements or fluctuation in demand that exhibit no pattern and occur on a random basis.

Question 55

The ________ is the average of the sum of the squared errors.

Question 56

________ is a type of exponential smoothing that can also include trend.

Question 57

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:

Compute a 5-period moving average for period 7.

Question 58

Daily highs in Sacramento for the past week (from least to most recent) were:
95, 102, 101, 96, 95, 90 and 92. Develop a forecast for today using a weighted moving average, with a weights of .6, .3, and .1, where the highest weights are applied to the most recent data.

Question 59

Given the following data on hotel check-ins for a 6-month period:

July:     70 rooms
August:     105 rooms
September:     90 rooms
October:     120 rooms
November:    110 rooms
December:     115 rooms



-With alpha = 0.2, what is the simple exponential smoothing forecast for October? Assume the forecast for July was 80 rooms.

Question 60

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:

Compute a 3-period moving average for period 7.

Question 61

The following sales data are available for 2003-2008:

Calculate the average error.

Question 62

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:

Determine the equation that relates ads and increased sales.

Question 63

Simple exponential smoothing is being used to forecast demand. The previous forecast of 66 turned out to be four units less than actual demand. If the next forecast is 66.6, what is the value of the smoothing constant, α?

Question 64

Quarterly sales is given for the past 3 years. Determine the seasonal factors for each quarter.

Question 65

Robert has the following accounts on money spent on gambling and winnings:
$$\begin{array} { c c } \text { Money Spent } & \text { Money Won } \\\hline 1000 & 2500 \\1200 & 4000 \\1800 & 4500 \\2000 & 4600 \\2500 & 5000 \\2800 & 4800 \\3500 & 5600 \\4000 & 6000 \\4200 & 5800 \\\hline\end{array}$$

-Determine the correlation coefficient and the coefficient of determination.

Question 66

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:

If Sally runs 15 ads, how much will sales increase?

Question 67

Recent past demand for product ZXT is given in the following table.

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.

Question 68

If the forecast is 14 and the actual value is 15, then the error this period is

Question 69

The following data summarizes the historical demand for a product.

Use exponential smoothing with α = .2 and a smoothed forecast for July of 32 to determine August and September's smoothed forecasts.

Question 70

Robert has the following accounts on money spent on gambling and winnings:

Develop a regression equation that relates the money Robert spends and the money he wins.

Question 71

Assume that the forecasted demand for 2006 is 15. Use the following data set and exponential smoothing with α = 0.4 and determine the forecasted demand for 2009.

Question 72

Robert wants to know if there is a relation between money spent on gambling and winnings.
What is the coefficient of determination?

Question 73

The following sales data are available for 2003-2008: $$\begin{array} { c c } \text { Year } & \text { Sales } \\\hline 2003 & 7 \\2004 & 12 \\2005 & 14 \\2006 & 20 \\2007 & 16 \\2008 & 25 \\\hline\end{array}$$
Determine a 4-year moving average forecast for 2008 and 2009.

Question 74

If the forecast is 33 and the actual value is 44, then the error this period is ________.

Question 75

Given the following data, compute the MAD for the forecast.
Year Demand Forecast

Question 76

Recent past demand for product ZXT is given in the following table.
$$\begin{array} { | c | c | } \hline \text { Month } & \begin{array} { c } \text { Actual } \\\text { Demand }\end{array} \\\hline \text { February } & 20 \\\hline \text { March } & 22 \\\hline \text { April } & 33 \\\hline \text { May } & 35 \\\hline \text { June } & 31 \\\hline \text { July } & 48 \\\hline \text { August } & 41 \\\hline\end{array}$$

-Use simple exponential smoothing with alpha = .4 and determine the forecasted demand for August and September. Assume that the smoothed forecast for July is 38.

Question 77

If the absolute errors were calculated for 5 periods and the sum of the absolute deviation is 60, what is the value of the MAD?

Question 78

Recent past demand for product ZXT is given in the following table.
$$\begin{array} { | c | c | } \hline \text { Month } & \begin{array} { c } \text { Actual } \\\text { Demand }\end{array} \\\hline \text { February } & 20 \\\hline \text { March } & 22 \\\hline \text { April } & 33 \\\hline \text { May } & 35 \\\hline \text { June } & 31 \\\hline \text { July } & 48 \\\hline \text { August } & 41 \\\hline\end{array}$$

-Base on a three-month weighted moving average with weights w1 = .1, w2 = .4, and w3 = .5 (most recent), determine the forecasted demand for August and September. What is the forecast error in August?

Question 79

If the forecast is 25 and the actual value is 25, then the error this period is ________.

Question 80

The following sales data are available for 2003-2008.
Determine a 4-year weighted moving average forecast for 2009, where weights are
W1 = .1, W2 = .2, W3 = .2 and W4 = .5.