360 Test 2 part 2

With regard to correlation and regression analyses, which of the following statements is erroneous? -Correlation analysis identifies variables that move together without implying cause-and-effect relationships -linear regression defines the relationship between a single independent variable and a dependent variable -multiple regression seeks to determine the effect of several independent variables on a single dependent variable -in linear regression, the formula for a straight line is y=a+bx, where b is the intercept and a is the slope of a line or trend of the line

-Correlation analysis identifies variables that move together without implying cause-and-effect relationships

All of the following are advantages of using surveys of buying intentions except -research gives the forecaster a viable forecasting basis when others may be inadequate or impossible to use, such as when there are no historical data -buyer intentions can be inaccurate because what people say they're going to buy and what they actually buy can differ -forecasts are relatively fast and inexpensive when only a small number of customers are surveyed -research gives the sales forecaster a good prediction of customers' buying intentions and some of the subjective reasoning behind their answers

-buyer intentions can be inaccurate because what people say they're going to buy and what they actually buy can differ

Budgeting offers the sales department all of the following advantages except -ensuring a systematic approach to allocating resources -creating awareness of the necessity to coordinate selling -establishing standards for measuring the performance of the sales organization -none of the above because all are advantages

-none of the above because all are advantages

Which of the following steps is not a part of the systematic budget preparation process? -review and analyze the situation beginning with the last budget period's variances -request more than actually needed and spend everything you get to ensure obtaining one's fair share of the future budget allocations -develop a preliminary allocation of resources to particular activities -communicate sales objectives and goals with their relative priorities to all management levels

-request more than actually needed and spend everything you get to ensure obtaining one's fair share of the future budget allocations

_______ refers to a sales forecast method based on sales force estimates of sales in the planning horizon

A sales force composite

A sales forecast method based on key managers' best estimates of sales in a given planning horizon refers to a sales force composite.

FALSE

Quotas refer to the portion of market potential that one among a set of competing firms can reasonably expect to obtain.

FALSE

The North American Industrial Classification System is a system for categorizing consumer products and service industries

FALSE

Events that are conceivable but less likely than based directly on the forecast are known as a contingency.

TRUE

Standard Industrial Classification is a uniform numbering system for categorizing nearly all industries according to their particular product or operation

TRUE

The breakdown approach is particularly useful and reliable when forecasting for periods of six months or longer. The buildup approach becomes more attractive as the time frame gets shorter.

TRUE

The sales and operational planning process refers to an organized process that uses sales inputs to forecast business for upcoming periods of varying length.

TRUE

Using historical data to predict future sales is called time-series technique

TRUE

The most widely used approach to estimating industrial demand uses information provided by

The Standard Industrial Classification Manual

________ is a quantitive forecast whereby the dependent variable is sales, and the independent variable is time.

Trend analysis

The forecasts developed mathematically based on sales in recent time periods refer to

a moving average

When pre dicing sales (y) with five independent variables (x1 through x5), a multiple R-square of 0.493 would indicate that

about 49 percent of the total variation in sales is explained by the independent variables

A sales forecast that is too low can lead to all of the following except -a cash shortage -inadequate promotion to reach the market -an overstock -price increases to allocate scarce products

an overstock

Bernie Skolnik is trying to decide what forecasting method to use. He is especially concerned that the forecasting method be (a) understood by top management and (B) allow for possible changing future market conditions. Mr. Skolnik would be most interested in which of the following criteria for evaluating forecasting methods?

comprehensibility and accuracy

A type of moving average that represents the weighted sum of all past numbers in a time series, placing the heaviest weight on the most recent data, is known as

exponential smoothing

In multiple regression, R values between 0.5 and 0.75 suggest

good predictive power

The fourth step in preparing the annual sales budget is to

identify specific market opportunities and problems

Managers evaluate and adjust each salesperson's estimate before combining them to form an overall forecast. All of the following are disadvantages of the sales force composite approach except -it allows estimates to be prepared by products, customers, and territories so that a final, detailed forecast is readily available -it allows salespeople to deliberately underestimate their forecasts so that they can reach their quotas more easily -it yields forecasts based on present rather than future conditions because salespeople often lack the perspective for future planning -it requires a considerable amount of sales force time that otherwise could be spent in the field attracting new customers

it allows estimates to be prepared by products, customers, and territories so that a final, detailed forecast is readily available

Managers evaluate and adjust each salesperson's estimate before combining them to form an overall forecast. All of the following are advantages of the sales force composite approach except

it relies on input from salespeople who are not trained in forecasting, so the forecasts are often too optimistic or too pessimistic

Subjective forecasts based on knowledgeable people's opinions instead of being analytically derived refer to

non-quantitative forecasting techniques

Budgeting offers the sales department all the following advantages except -ensuring a systematic approach to allocating resources -creating awareness of the necessity to coordinate selling -establishing standards for measuring the performance of the sales organization

none of the above because all are advantages

The buying power index for a geographic area is a weighted combination of the area's

personal income, retail sales, and population

Quantitive sales forecasting techniques include all of the following except

the Delphi method