MGMT 3450 CH 3

Which of the following is the correct formula for the trend-adjusted exponential smoothing forecast?

TAFt+1=St+Tt

A firm is forecasting the sales of carpets based on the number of building permits issued in their county. Which technique are they using?

Associative model

Which of the following statements about forecast error is/are true?

Forecast error is the difference between the actual and predicted values in a given period. Negative errors occur when the forecast is too high. Positive errors occur when the forecast is too low.

Which of the following statements about forecasts is/are correct?

Forecasts are the basis for virtually all decisions made in a business. Forecasts enable managers to plan for the future.

Which of the following are elements of good forecasts?

Forecasts should be easy to understand and use. Forecasts should be reliable. Forecasts should be cost-effective.

Which of the following are true of good forecasts?

Forecasts should be in meaningful (understandable) units. Forecasts should be accurate. Forecasts should be cost-effective.

Which of the following is the correct formula for an n-period moving average forecast for time period t?

Ft=∑i=1n (At−i)/n

Which of the following statements is NOT true about forecasts?

If done carefully, forecasts very rarely are inaccurate. Forecasting aggregates of items (e.g., regional sales) accurately is easier than forecasting individual items. Forecasts farther into the future are more difficult to do accurately.

Which of the following statements about the steps in the forecasting process are true?

It is important to first determine the purpose of the forecast. The forecast may not perform as desired, so it is necessary to monitor the process.

Which of the following is/are true statements about simple linear regression?

It is important to plot the data to see if a linear model is appropriate. It applies only when one predictor variable is used.

Forecasts that use subjective inputs such as opinions from consumer surveys, sales staff, managers, executives, and experts.

Judgmental forecasts

Executive opinions are generally used for what type of forecasts?

Long-range

Which is the correct interpretation of MAPE?

MAPE is the average absolute percent error.

Which is the correct interpretation of MSE?

MSE is the average squared forecast error.

Forecasts are the basis for many decisions and an essential input for what?

Matching supply with demand

As a forecasting tool, the Delphi method is useful for what type of forecasting?

Technological forecasting

Which of the following are considerations to be taken into account when choosing a forecasting technique?

The accuracy of the method. The availability of data. The type of data.

Which of the following are considerations to be taken into account when choosing a forecasting technique?

The availability of computer software. The cost of the method. The availability of data.

The essence of associative techniques is the development of an equation that summarizes the effects of _____.

The essence of associative techniques is the development of an equation that summarizes the effects of _____.

In the context of using salesforce opinion for forecasting, which of the following statements is true about salesforce opinions?

The salesforce has a sense of what customers want because of their direct contact with customers.

In the context of using salesforce opinion for forecasting, identify true statements about salesforce opinions as a source of information for the forecast.

The salesforce is often aware of any plans the customers may be considering for the future. The salesforce is less likely to be able to distinguish between what customers would like to do and what they actually will do.

Time series data is a _____________- ______________sequence of observations taken at regular intervals. (Enter only one word per blank.)

Time - Ordered

Which of the following statements about time-series data is/are always true?

Time series are observed at regular intervals. Forecasts using time series data assume that past patterns will continue in the future.

Seasonal variation can occur on a daily or weekly basis, not just a monthly or quarterly basis.

True

The two most important aspects of a forecast are the expected level of demand and the degree of accuracy that can be assigned to the forecast.

True

Which of the following is the correct formula for the current trend estimate using trend-adjusted exponential smoothing?

Tt=Tt-1+β(TAFt-TAFt-1-Tt-1)

Which of the following statements is/are true about trend-adjusted exponential smoothing?

Unlike with trend analysis, the trend estimate can be adjusted if it changes. It should be used instead of simple exponential smoothing when there is a trend present in the data.

Which of the following is the correct equation for the least squares regression line?

Yc=a+bx

Which of the following is/are advantages of consumer surveys? (Check all that apply.)

You can get information that may be unavailable anywhere else. Consumers are able to give direct feedback to companies.

Which are the correct interpretations of a and b in the trend equation F=a+bt?

a is the intercept, b is the slope of the line.

Which of the following is the correct formula for forecast error in period t?

et=At-Ft

Forecast accuracy for groups of items tends to be ______ than for individual items.

greater

The Delphi Method is an _____________process which seeks to find a___________________________ forecast.

iterative consensus

The moving average forecast uses ______ actual data values to generate a forecast.

two or more of the most recent

Predictor variables are:

used in regression to predict values of the variable of interest. related to the variable of interest. dependent variables.

Which of the following is/are true statements about simple linear regression?

-If the correlation is small, the predictor variable is not of much value and another variable may be better. -All data points carry equal weight.

Which of the following is/are the disadvantages of using consumer surveys for forecasting?

-A considerable amount of knowledge is required to correctly interpret the results for valid information. -Consumer opinion may be temporarily influenced by outside factors like sales pitches. -There is no way to identify all potential customers.

Which of the following are possible sources of forecast errors?

-Changes in the variables or relationships -Random variation -Irregular variations -Incorrect forecasting method or interpretation

Which of the following are implications of accurate short-term forecasts?

-Increased profits through improved operations. -Increased confidence, which would allow the diversion of resources to longer-term planning. -Greater credibility throughout the organization.

Which of the following is/are true about forecasts?

-The farther into the future we try to forecast, the less accurate the forecast becomes. -There will generally be some inaccuracy in the forecast, i.e., the actual values will differ from forecasted values. -It is assumed that any patterns or causal systems that were in place in the past will continue in the future.

Which of the following situations signify that a forecasting method may need to be adjusted or changed?

A change or shift in the variable that the model cannot deal with The omission of an important variable The appearance of a new variable

Which of the following statements about naive forecasting are true? (Check all that apply.)

Naive forecasts use a single previous value to forecast a future value. Naive forecasts can be used with stable time series, with seasonal variations, or with trends. Naive forecasts are easy to understand.

Put the steps in the forecasting process in the correct order, starting at the top. (Place the first step at the top.)

Determine Establish Obtain select Make Monitor

Which of the following is the correct formula for the linear trend equation?

F=a+bt

Executive opinions are often used to develop __________-__________plans and _________________product development.

long - term new

The least squares line is the line that______________ the sum of the ____________________vertical deviations of the data points from the line.

minimizes, squared

A(n) _____ uses a single previous value of a time series as the basis of a forecast. This approach can be used with a stable series, with seasonal variations, or with trend.

naive forecast

In time-series data, _____ are regularly repeating upward or downward movements in series values that can be tied to recurring events.

seasonal variations