Chapter 9 Homework

Alex, a manager at Symbic Inc., plotted the company's total energy costs of 1 billion dollars over the past 10 years on a chart. The chart suggested that the energy costs appear to be increasing in a fairly predictable linear fashion and that the energy costs are related to time by a linear function Y t =3+5t, where Y trepresents the estimate of the energy cost in year t. Given the equation, which of the following is the value of the intercept of the straight line that best fits the time series? a. 5 b. 10 c. 3 d. 1

3

_____ is a common approach to gather data for judgmental forecasts. a. Single exponential smoothing b. Regression analysis c. A survey questionnaire d. A moving average model

A survey questionnaire

__________is the difference between the observed value of the time series and the forecast. a. Forecast consumption b. Forecast precision c. Forecast error d. Forecast density

Forecast error

_____ are needed to plan workforce levels, allocate budgets among divisions, and schedule jobs and resources. a. Intermediate-range forecasts b. Make-to-stock operations c. Short-range forecasts d. Make-to-order operations

Intermediate-range forecasts

_____ are necessary to plan for facility expansion. a. Long-range forecasts b. Make-to-order operations c. Make-to-stock operations d. Intermediate-range forecasts

Long-range forecasts

__________is a method for building a statistical model that defines a relationship between a single dependent variable and one or more independent variables, all of which are numerical. a. The Delphi method b. Judgmental forecasting c. The Cooke method d. Regression analysis

Regression analysis

_____ are used by operations managers to plan production schedules and assign workers to jobs. a. Short-range forecasts b. Credit scorecards c. Intermediate-range forecasts d. Balanced scorecards

Short-range forecasts

__________is a forecasting technique that uses a weighted average of past time-series values to forecast the value of the time series in the next period. a. A moving average forecast b. A grassroots forecast c. Single exponential smoothing d. regression analysis

Single exponential smoothing

__________is based on the assumption that the future will be an extrapolation of the past. a. Judgmental forecasting b. Statistical forecasting c. The Delphi method d. The Cooke method

Statistical forecasting

In the context of a fairly stable time series with relatively little random variability, which of the following statements is true of single exponential smoothing (SES)? a. Exponential smoothing models completely forget past data if the smoothing constant is strictly between 0 and 1. b. Typical values for the smoothing constant are in the range of 1 to 1.5. c. Values of the smoothing constant smaller than 0.1 allow a forecast to react faster to changing conditions. d. Values of the smoothing constant larger than 0.5 place more emphasis on recent data.

Values of the smoothing constant larger than 0.5 place more emphasis on recent data

A tracking signal provides a method for monitoring a forecast by quantifying _____. a. validity b. throughput c. bias d. probability

bias

In the context of forecasting, the term__________refers to the tendency of forecasts to consistently be larger or smaller than the actual values of the time series. a. fad b. variability c. bias d. trend

bias

In the context of data patterns in a time series, regular patterns in a data series that take place over long periods of time are called _____. a. orthographic patterns b. seasonal patterns c. parallel patterns d. cyclical patterns

cyclical patterns

Moving average (MA) methods work best when: a. demand is relatively stable and consistent. b. a long planning horizon is involved. c. a cyclical pattern is observed in a time series. d. there is a major trend in a time series.

demand is relatively stable and consistent

If the time series in an exponential smoothing model exhibits a negative trend, the _____. a. forecast will overshoot the actual values b. future forecasts will rely solely upon expertise of people in developing forecasts c. mean square error will be negative d. value of smoothing constant will either be less than zero or greater than one

forecast will overshoot the actual values

In the context of data patterns in a time series, a(n) _____ is a one-time variation that is explainable. a. random variation b. seasonal variation c. cyclical variation d. irregular variation

irregular variation

When no historical data are available, _____ is the sole basis for predicting future demands. a. regression analysis b. exponential smoothing c. judgmental forecasting d. statistical forecasting

judgmental forecasting

An exponential smoothing model must have a smoothing constant (α) _____ to be roughly equivalent to a moving average model with a seven-month moving average. a. less than or equal to 0.10 b. more than 0.20 c. more than 0.10 but less than or equal to 0.15 d. more than 0.15 but less than or equal to 0.20

more than 2.0

In the context of data patterns and variations in a time series, _____ are characterized by repeatable periods of ups and downs over short periods of time. a. cyclical patterns b. irregular variations c. random variations d. seasonal patterns

seasonal patterns

A__________is the underlying pattern of growth or decline in a time series. a. planning horizon b. bias c. trend d. forecast error

trend