Deck 11: Forecasting

Question 1

A qualitative forecast would most likely be used for:

A)Aggregate planning
B)Scheduling
C)Process design
D)Inventory management

Answer 1

C

Question 2

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

A)Mean square error
B)Cumulative sum of forecast error
C)Mean absolute deviation of forecast error
D)Cumulative absolute deviation of forecast error
E)Mean absolute percentage error

Answer 2

D

Question 3

Which phrase most closely describes the Delphi forecasting technique?

A)Consumer survey
B)Individual opinions
C)Rounds of anonymous data collection
D)Test markets
E)Historic data

Answer 3

C

Question 4

Using a three-week moving average,what is your forecast for week 6?

A)30
B)35
C)32.5
D)25

Question 5

What is the exponentially smoothed forecast for week 6? (Use F₅ = 33 and alpha = 0.0)

A)33
B)31.7
C)30
D)20

Question 6

Given the following information for period 15,what will be the smoothed mean absolute deviation for period 16? Demand = 120
Forecast = 180
MAD₁₅ = 50
Alpha = 0.3

A)77
B)53
C)17
D)43

Question 7

A method of forecasting that best describes the flows from one sector of the economy to another is called:

A)Regression
B)Econometric model
C)Input-output model
D)Simulation model
E)Time-series model

Question 8

Using the data from question 11,calculate the moving average forecast for period 7 using a four-period moving average:

A)60
B)43.25
C)57.75
D)55.25

Question 9

What is the exponentially smoothed forecast for week 2? (Use F₁ = 25 and alpha = 0.2)

A)21.0
B)24.0
C)32.0
D)53.0

Question 10

You are given that the forecast for the current period of 70 turned out to be 6 units less than the actual demand.The forecast for the next period is 75.8.What must alpha equal (rounded to 4 decimals)if a simple exponential smoothing forecast method were being used?

A)0.0042
B)0.9667
C)0.0400
D)0.0967
E)None of the above

Question 11

Which of the following is NOT one of the most important factors in selecting a forecasting model?

A)User and system sophistication
B)Time and resources available
C)Data availability
D)Customer sophistication
E)Data pattern

Question 12

If one time-series has low demand values and another has higher demand values,_____ will be an accurate way of comparing the errors for these two time-series.

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

Question 13

|Demand - Forecast| is:

A)Forecast error
B)Mean absolute percentage error
C)Absolute deviation of forecast error
D)Mean absolute deviation of forecast error

Question 14

Under exponential smoothing,if we want forecasts to be very responsive to recent demand,the value of alpha should be:

A)Large
B)Small
C)Moderate
D)Zero
E)The value of alpha does not matter.

Question 15

If a sales representative tells his or her manager,"I hope to sell 20% more than last year," this should be considered:

A)A forecast
B)A performance measure
C)A goal
D)A production plan

Question 16

A regression model is an example of which type of forecasting method?

A)Causal
B)Historical analogy
C)Qualitative
D)Life-cycle analogy

Question 17

Which of the following statements is/are true about time-series forecasting?

A)The basic strategy of time-series forecasting is to identify the magnitude and form of each component based on available past data.
B)Time-series methods are used to make detailed analyses of past demand patterns over time and to project these patterns forward into the future.
C)Under time-series methods,demand can be divided into components such as average level,trend,seasonality,cycle and error.
D)Time-series methods are useful for long-range forecasts.
E)a,b,and c

Question 18

A small company that manufactures plastic containers is attempting to select a method of forecasting yearly demand for the next 10 years.The company typically uses forecasts from sales representatives for yearly forecasts.The company has expanded its facilities,doubling capacity over the past years.Sales data for the last fifteen years are readily available. Which of the following forecasting methods would be preferred?

A)Qualitative
B)Simple exponential smoothing
C)Econometric
D)Box-Jenkins

Question 19

When should qualitative methods NOT be used?

A)When historic data are unreliable
B)When it is impossible to obtain historic data
C)For short-range,repetitive decisions
D)When making major,costly decisions,such as facilities location

Question 20

Which of the following is NOT a use of the error estimate?

A)To monitor erratic demand observations or outliers
B)To determine when the forecasting method is no longer tracking actual demand and needs to be revised
C)To set safety stocks or safety capacity
D)To determine parameter values that provide the most accurate forecasts
E)All the above are uses of the error estimate

Question 21

The Box-Jenkins method requires about 12 periods of past data.

Question 22

Simple exponential smoothing forecasts are reliable for forecasting long-term demand patterns.

Question 23

Quantitative forecasting methods should be used for determining the demand patterns of new products introduced in the market.

Question 24

Forecasting of demand is always equivalent to forecasting of sales.

Question 25

Which of the following is incorrect about Collaborative Planning,Forecasting and Replenishment (CPFR)?

A)The basic idea behind CPFR is to share forecasting information with the suppliers and customers in the supply chain.
B)CPFR is best applied to a few customers representing the bulk of demand.
C)Wal-Mart uses CPFR to coordinate its supply chain.
D)CPFR creates visibility in the supply chain minimizing the occurrence of the bullwhip in supply chains.
E)CPFR requires advanced forecasting tools such as Box-Jenkins to improve the forecasting accuracy.

Question 26

What are the three ways to accommodate forecasting errors?

Question 27

Tracking signal is the ratio between cumulative forecast error and the most recent estimate of mean absolute deviation.

Question 28

A time-series forecast model has only level,trend,and seasonal factor terms in it.

Question 29

_____ models are usually more accurate than ______ models for medium-to-long-range forecasts.

A)Time-series,causal
B)Causal,time-series
C)Time-series,qualitative
D)Qualitative,time-series
E)Qualitative,causal

Question 30

All forecasts should include two estimates: An estimate of the demand and an estimate of the forecasting error.

Question 31

United Colors of Benetton is facing a serious problem.The company is a global fashion garment manufacturer and is well known for its speed of new product introduction.The company is planning to introduce its summer collection (2005 men's fashion wear)and is interested in estimating the demand for the current year.The company had started this concept of summer collection from the year 1995 and the demands for the past years are shown below.
Suggest a suitable forecasting method that could be utilized by Benetton while predicting the demand for the upcoming year.Highlight the important factors that should be considered while selecting the forecast method.