Question 1

The owners of Hal's Cookie Company have collected sales data for the past 8 months.These data are shown as follows:
  Using a starting forecast in period 1 of 100,the forecast bias over periods 2-8 is negative when a single exponential smoothing model is used with a smoothing constant of 0.20

Accepted Answer

A) True 
 B)False

Question 2

If you suspect that your trend forecasting model may have autocorrelated forecast errors,which the following should you compute?

Accepted Answer

A) The MAD 
B) The standard error of the estimate 
C) The Durbin-Watson test statistic 
D) The correlation coefficient

Question 3

In order for a time series to exhibit a seasonal component,the data must be measured in periods as short or shorter than quarterly.

Accepted Answer

A) True 
 B)False

Question 4

Prior to conducting double exponential smoothing a simple linear regression is conducted and the trend equation is  = 42 + 38.3t,so the smoothed constant process value should be C0 = 38.3 and the smoothed trend value should be T0 = 42.

Accepted Answer

A) True 
 B)False

Question 5

In a simple exponential smoothing model,which of the following statements is true?

Accepted Answer

A) The forecast values are determined by computing a moving average of the previous 4 data periods if we are working with quarterly data. 
B) The larger the smoothing constant,the more smoothing that takes place in the model. 
C) If the data contain a lot of random or irregular ups and downs,then a larger smoothing constant should be used in an attempt to model these fluctuations. 
D) More smoothing of the data will take place if a smoothing constant value close to zero is used.

Question 6

A company has developed a linear trend regression model based on 16 quarters of data.The independent variable is the measure of time (t = 1 thru 16 where quarter 1 is winter quarter,2 is spring,etc. ).The company has also developed seasonal indexes for each quarter as follows:  The linear trend forecast equation is:  = 120 + 56t.
Given this information,what is the seasonally unadjusted forecast for period 19?

Accepted Answer

A) 1,064 
B) 1,184 
C) 828.80 
D) 986.7

Question 7

A seasonal index is a statistic that is computed from time-series data to indicate the effect of the seasonality in the time-series data.

Accepted Answer

A) True 
 B)False

Question 8

In using simple linear regression to find the linear trend in an annual time series from 1990 to 2005,the values 1990,1991,etc.are used as the values of the independent variable t when the regression is conducted.

Accepted Answer

A) True 
 B)False

Question 9

The Zocor Company is interested in forecasting period 13 sales for a product.It has 12 months of historical data.The following shows the data and the forecasted values for periods 1-12 using a single exponential smoothing model with a smoothing constant value equal to 0.20.  Which of the following would be the forecast for period 13?

Accepted Answer

A) 40.3 
B) 39.2 
C) 34.7 
D) 36.5

Question 10

An annual time series cannot exhibit a seasonal component.

Accepted Answer

A) True 
 B)False

Question 11

In analyzing a forecast model,what is the main advantage of using the MAD instead of the MSE?

Accepted Answer

The answer of In analyzing a forecast model,what is the...

Question 12

The Zocor Company is interested in forecasting period 13 sales for a product.It has 12 months of historical data.The following shows the data and the forecasted values for periods 1-12 using a single exponential smoothing model with a smoothing constant value equal to 0.20  What is the forecast bias value for the model over periods 2-12?

Accepted Answer

A) About 8.7 
B) Approximately -11.9 
C) About ± 8.9 
D) None of the above

Question 13

Under which of the following conditions would you suggest that a double exponential smoothing model should be used instead of a single exponential smoothing model?

Accepted Answer

A) When the time-series data exhibit a trend 
B) When there are two main time-series variables involved in the forecast application 
C) When the data exhibit only random variation 
D) When the data set is extremely uneven

Question 14

Stock analysts have recently stated in a meeting on Wall Street that over the past 50 years there have been periods of high market prices followed by periods of lower prices but over time prices have moved upwards.Given their statement,stock prices most likely exhibit only trend and cyclical components.

Accepted Answer

A) True 
 B)False

Question 15

A plot of the time series with time on the horizontal axis is an effective means of assessing whether the series is linear or nonlinear.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following approaches might be used to determine which value for the smoothing constant to use in a single exponential smoothing model?

Accepted Answer

A) Select the value that produces the smallest MAD value 
B) Select the value that maximizes the MSE 
C) Use the value that gives the largest MAD value 
D) Use the value that smoothes the data the most

Question 17

Which of the following statistical measures is used to help decision makers assess the potential for their model to provide usable forecasts?

Accepted Answer

A) The mean absolute deviation 
B) The mean square error 
C) Both A and B 
D) Neither A nor B

Question 18

A company has recorded 12 months of sales data for the past year and has found the linear trend equation is  = 286 + 64.9t.Based on this information,which of the following is the forecast for period 13?

Accepted Answer

A) 3718 
B) 842.4 
C) 350.8 
D) 1129.7

Question 19

A time series is shown below.Perform single exponential smoothing for this data set using α = 0.2  What is the value of the forecast for period 6?

Accepted Answer

A) 40 
B) 36 
C) 31.5 
D) 33.2

Question 20

Gibson,Inc.is a holding company that owns several businesses.One such business is a truck sales company.To help in managing this operation,managers at Gibson have collected sales data for the past 20 years showing the number of trucks sold each year.They have then developed the linear trend forecasting model shown as follows:  Based on this information,it appears that the time series has a strong positive linear trend component.

Accepted Answer

A) True 
 B)False

Exam 16: Analyzing and Forecasting Time-Series Data

The owners of Hal's Cookie Company have collected sales data for the past 8 months.These data are shown as follows: Using a starting forecast in period 1 of 100,the forecast bias over periods 2-8 is negative when a single exponential smoothing model is used with a smoothing constant of 0.20

If you suspect that your trend forecasting model may have autocorrelated forecast errors,which the following should you compute?

In order for a time series to exhibit a seasonal component,the data must be measured in periods as short or shorter than quarterly.

Prior to conducting double exponential smoothing a simple linear regression is conducted and the trend equation is = 42 + 38.3t,so the smoothed constant process value should be C₀ = 38.3 and the smoothed trend value should be T₀ = 42.

In a simple exponential smoothing model,which of the following statements is true?

A seasonal index is a statistic that is computed from time-series data to indicate the effect of the seasonality in the time-series data.

In using simple linear regression to find the linear trend in an annual time series from 1990 to 2005,the values 1990,1991,etc.are used as the values of the independent variable t when the regression is conducted.

An annual time series cannot exhibit a seasonal component.

In analyzing a forecast model,what is the main advantage of using the MAD instead of the MSE?

Under which of the following conditions would you suggest that a double exponential smoothing model should be used instead of a single exponential smoothing model?

A plot of the time series with time on the horizontal axis is an effective means of assessing whether the series is linear or nonlinear.

Which of the following approaches might be used to determine which value for the smoothing constant to use in a single exponential smoothing model?

Which of the following statistical measures is used to help decision makers assess the potential for their model to provide usable forecasts?

A company has recorded 12 months of sales data for the past year and has found the linear trend equation is = 286 + 64.9t.Based on this information,which of the following is the forecast for period 13?

A time series is shown below.Perform single exponential smoothing for this data set using α = 0.2 What is the value of the forecast for period 6?