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43) If Brandon Edward were working to develop a forecast using a moving averages approach, but he noticed a detectable trend in the historical data, he should: A) use weights to place more emphasis on recent data. B) use weights to minimize the importance of the trend. C) change to an associative multiple regression approach. D) use a simple moving average. E) change to a qualitative approach.

A

Which of the following is not present in a time series? A) seasonality B) operational variations C) trend D) cycles E) random variations

B

The forecasting technique that pools the opinions of a group of experts or managers is known as: A) the expert judgment model. B) multiple regression. C) jury of executive opinion. D) market survey. E) management coefficients.

C

Yamaha manufactures which set of products with complementary demands to address seasonal variations? A) golf clubs and skis B) swimming suits and winter jackets C) jet skis and snowmobiles D) pianos and guitars E) ice skates and water skis

C

A forecast based on the previous forecast plus a percentage of the forecast error is a(n): A) qualitative forecast. B) naive forecast. C) moving average forecast. D) weighted moving average forecast. E) exponential smoothing forecast.

E

Many services maintain records of sales noting: A) the day of the week. B) unusual events. C) the weather. D) holiday impacts. E) all of the above.

E

A six-month moving average forecast is generally better than a three-month moving average forecast if demand: A) is rather stable. B) has been changing due to recent promotional efforts. C) follows a downward trend. D) exceeds one million units per year. E) follows an upward trend.

A

Forecasts are usually classified by time horizon into which three categories? A) short-range, medium-range, and long-range B) finance/accounting, marketing, and operations C) strategic, tactical, and operational D) exponential smoothing, regression, and time series E) departmental, organizational, and industrial

A

The fundamental difference between cycles and seasonality is the: A) duration of the repeating patterns. B) magnitude of the variation. C) ability to attribute the pattern to a cause. D) all of the above E) none of the above

A

The two general approaches to forecasting are: A) qualitative and quantitative. 6 Copyright © 2017 Pearson Education, Inc. B) mathematical and statistical. C) judgmental and qualitative. D) historical and associative. E) judgmental and associative. Answer: A

A

Which of the following techniques uses variables such as price and promotional expenditures, which are related to product demand, to predict demand? A) associative models B) exponential smoothing C) weighted moving average D) moving average E) trend projection

A

Which of the following values of alpha would cause exponential smoothing to respond the SLOWEST to forecast errors? A) 0.10 B) 0.2246 C) 0.50 D) 0.90 E) cannot be determined

A

Which time-series model below assumes that demand in the next period will be equal to the most recent period's demand? A) naïve approach B) moving average approach C) weighted moving average approach D) exponential smoothing approach E) trend projection

A

4) As compared to long-range forecasts, short-range forecasts: A) are less accurate. B) deal with less comprehensive issues supporting management decisions. C) employ similar methodologies. D) all of the above E) none of the above

B

A forecast with a time horizon of about 3 months to 3 years is typically called a: A) long-range forecast. B) medium-range forecast. C) short-range forecast. D) weather forecast. E) strategic forecast.

B

Computer monitoring of tracking signals and self-adjustment if a signal passes a preset limit is characteristic of: A) exponential smoothing including trend. B) adaptive smoothing. C) trend projection. D) focus forecasting. E) multiple regression analysis.

B

John's House of Pancakes uses a weighted moving average method to forecast pancake sales. It assigns a weight of 5 to the previous month's demand, 3 to demand two months ago, and 1 to demand three months ago. If sales amounted to 1000 pancakes in May, 2200 pancakes in June, and 3000 pancakes in July, what should be the forecast for August? A) 2400 B) 2511 C) 2067 D) 3767 E) 1622

B

Short-range forecasts tends to ________ longer-range forecasts. A) be less accurate than B) be more accurate than C) have about the same level of accuracy as D) employ the same methodologies as E) deal with more comprehensive issues than

B

The three major types of forecasts used by organizations in planning future operations are: A) strategic, tactical, and operational. B) economic, technological, and demand. C) exponential smoothing, Delphi, and regression. D) causal, time-series, and seasonal. E) departmental, organizational, and territorial.

B

Which of the following is NOT a step in the forecasting process? A) Determine the use of the forecast. B) Eliminate any assumptions. C) Determine the time horizon of the forecast. D) Select the forecasting model. E) Validate and implement the results.

B

12) Which of the following statements about time-series forecasting is true? A) It is always based on the assumption that future demand will be the same as past demand. B) It makes extensive use of the data collected in the qualitative approach. C) It is based on the assumption that the analysis of past demand helps predict future demand. D) Because it accounts for trends, cycles, and seasonal patterns, it is always more powerful than associative forecasting. E) All of the above are true.

C

5) Which of the following uses three types of participants: decision makers, staff personnel, and respondents? A) jury of executive opinion B) sales force composite C) Delphi method D) associative models E) time series

C

A fundamental distinction between trend projection and linear regression is that: A) trend projection uses least squares while linear regression does not. B) only linear regression can have a negative slope. C) in trend projection the independent variable is time; in linear regression the independent variable need not be time, but can be any variable with explanatory power. D) trend projection can be a function of several variables, while linear regression can only be a function of one variable. E) trend projection uses two smoothing constants, not just one.

C

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

C

Forecasts used for new product planning, capital expenditures, facility location or expansion, and R&D typically utilize a: A) short-range time horizon. B) medium-range time horizon. C) long-range time horizon. D) naive method, because there is no data history. E) trend extrapolation.

C

Given an actual demand this period of 103, a forecast value for this period of 99, and an alpha of .4, what is the exponential smoothing forecast for next period? A) 94.6 B) 97.4 C) 100.6 D) 101.6 E) 103.0

C

Given an actual demand this period of 61, a forecast for this period of 58, and an alpha of 0.3, what would the forecast for the next period be using exponential smoothing? A) 45.5 B) 57.1 C) 58.9 D) 61.0 E) 65.5

C

Given forecast errors of -1, 4, 8, and -3, what is the mean absolute deviation? A) 2 B) 3 C) 4 D) 8 E) 16

C

Gradual upward or downward movement of data over time is called: A) seasonality. B) a cycle. C) a trend. D) exponential variation. E) random variation.

C

The primary purpose of the mean absolute deviation (MAD) in forecasting is to: A) estimate the trend line. B) eliminate forecast errors. C) measure forecast accuracy. D) seasonally adjust the forecast. E) remove random variations.

C

What forecasting systems combine the intelligence of multiple supply chain partners? A) FORE B) MULTISUP C) CPFR D) SUPPLY E) MSCP

C

Which of the following is NOT a characteristic of exponential smoothing? A) smoothes random variations in the data B) uses an easily altered weighting scheme C) weights each historical value equally D) has minimal data storage requirements E) uses the previous period's forecast

C

________ expresses the error as a percent of the actual values. A) MAD B) MSE C) MAPE D) FIT E) The smoothing constant

C

Demand for a certain product is forecast to be 800 units per month, averaged over all 12 months of the year. The product follows a seasonal pattern, for which the January monthly index is 1.25. What is the seasonally-adjusted sales forecast for January? A) 640 units B) 798.75 units C) 801.25 units D) 1000 units E) 83.33 units

D

In time series, which of the following cannot be predicted? A) large increases in demand B) cycles C) seasonal fluctuations D) random variations E) large decreases in demand

D

Increasing the number of periods in a moving average will accomplish greater smoothing, but at the expense of: A) manager understanding. B) accuracy. C) stability. D) sensitivity to real changes in the data. E) All of the above are diminished when the number of periods increases.

D

The degree or strength of a relationship between two variables is shown by the: A) alpha. B) mean. C) mean absolute deviation. D) coefficient of correlation. E) cumulative error.

D

The last four weekly values of sales were 80, 100, 105, and 90 units. The last four forecasts were 60, 80, 95, and 75 units. These forecasts illustrate: A) qualitative methods. B) adaptive smoothing. C) slope. D) bias. E) trend projection.

D

The tracking signal is the: A) standard error of the estimate. B) absolute deviation of the last period's forecast. C) MAD. D) ratio of cumulative error / MAD. E) MAPE.

D

Which of the following most requires long-range forecasting (as opposed to short-range or medium- range forecasting) for its planning purposes? A) job scheduling B) production levels C) cash budgeting D) capital expenditures E) purchasing

D

Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast? A) 0 B) 1 divided by the number of periods C) 0.5 D) 1.0 E) cannot be determined

D

Which of the following statements comparing exponential smoothing to the weighted moving average technique is TRUE? A) Exponential smoothing is more easily used in combination with the Delphi method. B) More emphasis can be placed on recent values using the weighted moving average. C) Exponential smoothing is considerably more difficult to implement on a computer. D) Exponential smoothing typically requires less record keeping of past data. E) Exponential smoothing allows one to develop forecasts for multiple periods, whereas the weighted moving average technique does not.

D

Which time-series model uses BOTH past forecasts and past demand data to generate a new forecast? A) naïve B) moving average C) weighted moving average D) exponential smoothing E) trend projection

D

13) Time-series data may exhibit which of the following behaviors? A) trend B) random variations C) seasonality D) cycles E) They may exhibit all of the above.

E

2) Taco Bell's unique employee scheduling practices are partly the result of using: 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.

E

5) One use of short-range forecasts is to determine: A) planning for new products. B) capital expenditures. C) research and development plans. D) facility location. E) job assignments.

E

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

E

Which of the following is not a type of qualitative forecasting? A) jury of executive opinion B) sales force composite C) market survey D) Delphi method E) moving average

E