Quantitative Methods Test 3

Past Values

A forecast is based *solely* on ___ ___ of a variable

Least Squares

If a time series exhibits a linear trend, the method of ___ ___ may be used to determine a trend line for future forecasts

Larger

If more observations are relevant, than larger or smaller? values of K are better in moving averages

Smaller

If the time series contains substantial random variability, is a smaller or larger value of *a* preferred in exponential smoothing?

Time Period Actual Observed Value

In linear trend projection, what is the independent variable? dependent variable?

Short

MA/WMA/Exp. Smooth. methods are most appropriate for ___ range forecasts

Underestimated Overestimated

Positive forecast error indicates forecasting method Under/Over? estimated actual value and Negative forecast error indicates forecasting method Under/Over? estimated actual value (choose correct answer for both)

Moving

Term ___ used because newly available observations replaces oldest observation

Seasonal

This pattern exists when there is repeating highs/lows over successive periods of time *within a year*

Smoothing Methods

The ma/wma/exp. smooth. are called ___ ___ because they smooth random fluctuates in time series

Horizontal

This pattern exists when data fluctuates around a constant mean

Trend and Seasonal Pattern

This is a combination of long term upward/downward movement and repeating highs/lows during said term

Exponential Smoothing

This is a weighted average of all observations in a time series

Time Series Analysis

This is discovering a pattern in historical data to extrapolate the pattern into the future

Time Series

This is plotting historical data over time with measurements taken at regular intervals

Cyclical

This is when the time series plot shows alternating sequence of points below and above trend line lasting *more than one year*. Generally due to multiyear business cycles. Extremely difficult to forecast

Trend

This pattern exists with gradual shifts to relatively high/low values over a long period of time. Can be *linear* or *nonlinear*. Result of long-term factors such as population, technology, etc...

Moving Average Weighted Moving Average Exponential Smoothing

What are the 3 forecast methods for time series with horizontal patterns

Horizontal Trend Seasonal Trend & Seasonal Cyclical

What are the five most common time series patterns?

Mean Error Mean Absolute Error (MAE) Mean Square Error (MSE) Mean Absolute Percentage Error (MAPE)

What are the four measures of forecast accuracy?

Info Is available Info is quantifiable Reasonable to assume pattern will continue

What are the three conditions necessary to using quantitative forecasting methods?

Forecast Error

What is the key concept of measuring forecast accuracy?

Mean Absolute Error

Which measure of forecast accuracy is the average of absolute values of errors?

Mean Error

Which measure of forecast accuracy is the average of errors?

Mean Square Error

Which measure of forecast accuracy is the average of forecast errors squared?

Mean Absolute Percentage Error

Which measure of forecast accuracy is the error divided by actual value?