OPMA CH 3 Forecasting

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

In business forecasting, what is usually considered a long-term time period?

2 years or longer

In business forecasting, what is usually considered a medium-term time period?

3 months - 2 years

If a firm produced a standard item with relatively stable demand. the smoothing constant alpha (reaction rate to differences) used in an exponential smoothing forecast model would tend to be in which of the following ranges?

5% to 10%

Heavy sales of umbrellas during a rain storm is an example of which of the following?

A casual relationship

In most cases, demand for products or services can be broken into several components. Which of the following is considered a component of demand?

Autocorrelation

In most cases, demand for products or services can be broken into several components. Which of the following is considered a component of demand?

Cyclical elements

Which of the following forecasting methods is very dependent on selection of the right individuals who will judgmentally be used to actually generate the forecast?

Delphi method

Which of the following is a possible source of bias error in forecasting?

Failing to include the right variables

A central premise of exponential smoothing is that more recent data is less indicative of the future than data from the distant past (T/F)

False

A good forecaster is one who develops special skills and experience at one forecasting technique and is capable of applying it to widely diverse situations (T/F)

False

Bayesian analysis is the simplest way to choose weights for the weighted moving average forecasting model (T/F)

False

Continual review and updating in light of new data is a forecasting technique called second-guessing (T/F)

False

Cyclical influences on demand are often expressed graphically as line (T/F)

False

Exponential smoothing is always the best and most accurate of all forecasting models (T/F)

False

For every forecasting problem there is one best forecasting technique (T/F)

False

In casual relationship forecasting leading indicators are used to forecast occurrences (T/F)

False

In decomposition of time series data it is relatively easy to identify cycles and auto-correlation components (T/F)

False

In the simple exponential smoothing forecast model you need at least 30 observations to set the smoothing constant alpha (T/F)

False

In the weighted moving average forecasting model the weights must add up to one times the number of data points (T/F)

False

It is difficult to identify the trend in time series data (T/F)

False

Linear regression is not useful for aggregate planning (T/F)

False

Market research is a quantitative method of forecasting (T/F)

False

Multiple regression analysis uses several regression models to generate a forecast (T/F)

False

Qualitative forecasting techniques generally take advantage of the knowledge of experts and therefore do not require much judgment (T/F)

False

RSFE stands for "reliable safety function error" (T/F)

False

Random errors in forecasting occur when an undetected secular trend is not included in a forecasting model (T/F)

False

The equation for exponential smoothing states that the new forecast is equal to the old forecast plus the error of the old forecast (T/F)

False

The standard error of the estimate of a linear regression is not useful for judging the fit between the data and the regression line when doing forecasts (T/F)

False

There are no differences in strategic and tactical forecasting. A forecast is a mathematical projection and its ultimate purpose should make no difference to the analyst (T/F)

False

Trend lines are usually the last things considered when developing a forecast. (T/F)

False

We usually associate the word "seasonal" with recurrent periods of repetitive activity that happen on other than an annual cycle (T/F)

False

When forecast errors occur in a normally distributed pattern, the ratio of the mean absolute deviation to the standard deviation is 2 to 1, or 2 x MAD = 1 standard deviation (T/F)

False

Which of the following is not one of the basic types of forecasting?

Force field analysis

In business forecasting, what is usually considered a short-term time period?

Less than 3 months

Which of the following forecasting methodologies is considered a casual forecasting technique?

Linear regression

In general, which forecasting time frame is best to detect general trends?

Long range forecasts

Which of the following forecasting methodologies is considered a qualitative forecasting technique?

Market research

Which of the following are used to describe the degree of error?

Mean absolute deviation

In general, which forecasting time frame best identifies seasonal effects?

Medium term forecasts

Which of the following forecasting methods uses executive judgement as its primary component for forecasting?

Panel consensus

In most cases, demand for products or services can be broken down into several components. Which of the following is not considered a component of demand?

Past data

Which of the following considerations is not a factor in deciding which forecasting model a firm should choose?

Product

In general, which forecasting time frame compensates most effectively for random variation and short term changes?

Short term forecasts

Which of the following forecasting methods can be used for short-term forecasting?

Simple exponential smoothing

Which of the following forecasting methodologies is considered a time series forecasting technique?

Simple moving average

A company has a MAD of 10. It wants to have a 99.7 percent control limits on its forecasting system. It's most recent tracking signal value is 3.1. What can the company conclude from this info?

The forecasting model is operating acceptably

If a firm produced a product that was experiencing growth in demand, the smoothing constant alpha (reaction rate to differences) used in an exponential smoothing forecasting model would tend to be which of the following?

The more rapid the growth, the higher the percentage

The exponential smoothing method requires which of the following data to forecast the future?

The most recent forecast

A restriction in using linear regression is that it assumes that past data and future projections fall on or near a straight line (T/F)

True

A time series is defined in the text as chronologically ordered data that may contain one or more components of demand variation: trend, seasonal, cyclical, auto-correlation, and random (T/F)

True

A tracking signal (TS) can be calculated using the arithmetic sum of forecast deviations divided by the MAD (T/F)

True

Because the factors governing demand for products are very complex, all forecasts of demand contain error (T/F)

True

Cyclical influences on demand may come from occurrences such as political elections, war or economic conditions. (T/F)

True

Decomposition of a time series means identifying and separating the time series data into its components (T/F)

True

Experience and trial and error are the simplest ways to choose weights for the weighted moving average forecast model (T/F)

True

Exponential smoothing forecasts always lag behind the actual occurrence but can be corrected somewhat with a trend adjustment (T/F)

True

In a forecasting model using simple exponential smoothing the data pattern should remain stationary (T/F)

True

In a forecasting model using simple moving average, the shorter the time span used for calculating the moving average, the closer the average follows volatile trends (T/F)

True

In exponential smoothing, it is desirable to use a higher smoothing constant when forecasting demand for a product experiencing high growth (T/F)

True

MAD statistics can be used to generate tracking signals (T/F)

True

RSFE stands for "running sum of forecast errors" (T/F)

True

Random errors can be defined as those that cannot be explained by the forecast model being used (T/F)

True

Regression is a functional relationship between two or more correlated variables, when one variable is used to predict another (T/F)

True

Simple exponential smoothing lags changes in demand (T/F)

True

The value of the smoothing constant alpha in an exponential smoothing model is between 0 and 1 (T/F)

True

The weighted moving average forecasting model uses a weighting scheme to modify the effects of individual data points. This is its major advantage over the simple moving average model (T/F)

True

Time series forecasting models make predictions about the future based on analysis of past data. (T/F)

True

In time series data depicting demand which of the following is not considered a component of demand variation?

Variance

Which of the following forecasting methodologies is considered a time series forecasting technique?

Weighted moving average


Kaugnay na mga set ng pag-aaral

EDTPA making good choices study guide

View Set

test 1- operations and production management

View Set