Question 1

Taco Bell's unique employee scheduling practices are partly the result of using

Accepted Answer

A)  point-of-sale computers to track food sales in 15 minute intervals 
B)  focus forecasting 
C)  a six-week moving average forecasting technique 
D)  multiple regression 
E)  A and C are both correct.

Question 2

The forecasting model that pools the opinions of a group of experts or managers is known as the

Accepted Answer

A)  expert judgment model 
B)  multiple regression model 
C)  jury of executive opinion model 
D)  consumer market survey model 
E)  management coefficients model

Question 3

If two variables were perfectly correlated, the correlation coefficient r would equal

Accepted Answer

A)  0 
B)  -1 
C)  1 
D)  B or C 
E)  none of the above

Question 4

__________ forecasts are concerned with rates of technological progress, which can result in the birth of exciting new products, requiring new plants and equipment.

Accepted Answer

The answer of __________ forecasts are concerned with rates of...

Question 5

A time series trend equation is 25.3 + 2.1 X. What is your forecast for period 7?

Accepted Answer

A)  23.2 
B)  25.3 
C)  27.4 
D)  40.0 
E)  cannot be determined

Question 6

For a given product demand, the time series trend equation is 53 - 4 X. The negative sign on the slope of the equation

Accepted Answer

A)  is a mathematical impossibility 
B)  is an indication that the forecast is biased, with forecast values lower than actual values 
C)  is an indication that product demand is declining 
D)  implies that the coefficient of determination will also be negative 
E)  implies that the cumulative error will be negative

Question 7

The __________ measures the strength of the relationship between two variables.

Accepted Answer

The answer of The __________ measures the strength of the...

Question 8

Which of the following is not a type of qualitative forecasting?

Accepted Answer

A)  executive opinions 
B)  sales force composites 
C)  consumer surveys 
D)  the Delphi method 
E)  moving average

Question 9

A firm has modeled its experience with industrial accidents and found that the number of accidents per year (Y) is related to the number of employees (X) by the regression equation Y = 3.3 + 0.049*X. R-Square is 0.68. The regression is based on 20 annual observations. The firm intends to employ 480 workers next year. How many accidents do you project?
 How much confidence do you have in that forecast?

Accepted Answer

The answer of A firm has modeled its experience with...

Question 10

List and briefly describe the three major types of forecasts.

Accepted Answer

The answer of List and briefly describe the three major...

Question 11

In a regression equation where Y is demand and X is advertising, a coefficient of determination (R²) of .70 means that 70% of the variance in advertising is explained by demand.

Accepted Answer

A) True 
 B)False

Question 12

A seasonal index for a monthly series is about to be calculated on the basis of three years' accumulation of data. The three previous July values were 110, 150, and 130. The average over all months is 190. The approximate seasonal index for July is

Accepted Answer

A)  0.487 
B)  0.684 
C)  1.462 
D)  2.053 
E)  cannot be calculated with the information given

Question 13

Forecasts of individual products tend to be more accurate than forecasts of product families.

Accepted Answer

A) True 
 B)False

Question 14

Patterns in the data that occur every several years are called circuits.

Accepted Answer

A) True 
 B)False

Question 15

Demand forecasts, also called __________ forecasts, are projections of demand for a company's products or services.

Accepted Answer

The answer of Demand forecasts, also called __________ forecasts, are...

Question 16

The following trend projection is used to predict quarterly demand: Y = 250 - 2.5t, where t = 1 in the first quarter. Seasonal (quarterly) indices are Quarter 1 = 1.5; Quarter 2 = 0.8; Quarter 3 = 1.1; and Quarter 4 = 0.6. What is the seasonally adjusted forecast for the next four quarters?

Accepted Answer

The answer of The following trend projection is used to...

Question 17

Favors Distribution Company purchases small imported trinkets in bulk, packages them, and sells them to retail stores. They are conducting an inventory control study of all their items. The following data are for one such item, which is not seasonal.
a. Use trend projection to estimate the relationship between time and sales (state the equation).
b. Calculate forecasts for the first four months of the next year.
 $$\begin{array} { | l | c | c | c | c | c | c | c | c | c | c | c | c | } 
\hline & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & 10 & 11 & 12 \
\hline \text { Month } & \text { Jan } & \text { Feb } & \text { Mar } & \text { Apr } & \text { May } & \text { Jun } & \text { Jul } & \text { Aug } & \text { Sep } & \text { Oct } & \text { Nov } & \text { Dec } \
\hline \text { Sales } & 51 & 55 & 54 & 57 & 50 & 68 & 66 & 59 & 67 & 69 & 75 & 73 \
\hline
\end{array}$$

Accepted Answer

The answer of Favors Distribution Company purchases small imported trinkets...

Question 18

A management analyst is using exponential smoothing to predict merchandise returns at an upscale branch of a department store chain. Given an actual number of returns of 154 items in the most recent period completed, a forecast of 172 items for that period, and a smoothing constant of 0.3, what is the forecast for the next period?
 How would the forecast be changed if the smoothing constant were 0.6?
 Explain the difference in terms of alpha and responsiveness.

Accepted Answer

The answer of A management analyst is using exponential smoothing...

Question 19

Which of the following is true regarding the two smoothing constants of the Forecast Including Trend (FIT) model?

Accepted Answer

A)  One constant is positive, while the other is negative. 
B)  They are called MAD and cumulative error. 
C)  Alpha is always smaller than beta. 
D)  One constant smoothes the regression intercept, whereas the other smoothes the regression slope. 
E)  Their values are determined independently.

Question 20

One advantage of exponential smoothing is the limited amount of record keeping involved.

Accepted Answer

A) True 
 B)False

Exam 4: Forecasting

Taco Bell's unique employee scheduling practices are partly the result of using

The forecasting model that pools the opinions of a group of experts or managers is known as the

If two variables were perfectly correlated, the correlation coefficient r would equal

__________ forecasts are concerned with rates of technological progress, which can result in the birth of exciting new products, requiring new plants and equipment.

A time series trend equation is 25.3 + 2.1 X. What is your forecast for period 7?

For a given product demand, the time series trend equation is 53 - 4 X. The negative sign on the slope of the equation

The __________ measures the strength of the relationship between two variables.

Which of the following is not a type of qualitative forecasting?

List and briefly describe the three major types of forecasts.

In a regression equation where Y is demand and X is advertising, a coefficient of determination (R²) of .70 means that 70% of the variance in advertising is explained by demand.

A seasonal index for a monthly series is about to be calculated on the basis of three years' accumulation of data. The three previous July values were 110, 150, and 130. The average over all months is 190. The approximate seasonal index for July is

Forecasts of individual products tend to be more accurate than forecasts of product families.

Patterns in the data that occur every several years are called circuits.

Demand forecasts, also called __________ forecasts, are projections of demand for a company's products or services.

The following trend projection is used to predict quarterly demand: Y = 250 - 2.5t, where t = 1 in the first quarter. Seasonal (quarterly) indices are Quarter 1 = 1.5; Quarter 2 = 0.8; Quarter 3 = 1.1; and Quarter 4 = 0.6. What is the seasonally adjusted forecast for the next four quarters?

Which of the following is true regarding the two smoothing constants of the Forecast Including Trend (FIT) model?

One advantage of exponential smoothing is the limited amount of record keeping involved.