MGMT CH 3

Which of the following statements about naive forecasting are true? -Naive forecasts can be used with stable time series, with seasonal variations, or with trends. -Naive forecasts are easy to understand. -Naive forecasts use multiple variables to try to make predictions. -Naive forecasts use a single previous value to forecast a future value. -Naive forecasts are not worthwhile.

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

Which of the following is/are disadvantages of the moving average forecast?

-Potential loss of information of less recent values by decreasing the number of values. -All the values of the average are weighted equally.

A number of different approaches can be used to obtain a starting forecast. Which of the following would be appropriate?

-Subjective value -Average of first several periods -Actual for the prior period

True or false: The expected level (value) of the forecasted quantity is the most important aspect of the forecast.

False

Which of the following is the correct formula for the n-period weighted moving average?

Ft = wt-n(At-n) +... +wt-2(At-2) + wt-1(At-1) +... + wt-n(At-n)

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

Ft=Ft-1+α(At-1-Ft-1)

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

Ft=∑i=1nAt−i/n

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 of the following statements is a correct characterization of salesforce opinions?

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

Which of the following statements is true about long-term forecasts?

They pertain to items that will take a long while to implement.

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.

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

greater

Executive opinions are often used to develop ___________-________ plans and __________ product development.

long-range; new

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

Short-term forecasts pertain to ongoing _____________. Long-term forecasts are an important ____________ planning tool.

operations; strategic

Which of the following statements is/are not a correct characterization of salesforce opinions?

-In every time, the sales people are able to distinguish between what customers would like to do and what they actually will do. -The salesforce is a good, unbiased source of information about customers' wants and needs.

Which of the following is/are advantages of the weighted moving average forecast? -It gives equal weight to all values. -It can be used for all types of time series. -It gives more recent values higher weight. -It is more reflective of the most recent occurrences.

-It gives more recent values higher weight. -It is more reflective of the most recent occurrences.

Which of the following is/are true about forecasts? -It achieves higher accuracy to predict values for single items than for multiple items together. -It is assumed that any patterns or causal systems that were in place in the past will continue in the future. -There will generally be some inaccuracy in the forecast, i.e., the actual values will differ from forecasted values. -The farther into the future we try to forecast, the less accurate the forecast becomes.

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

Time series data is a __________-__________ sequence of observations taken at regular intervals

time-ordered

With respect to the patterns formed by time-series data, _____ refers to a long-term upward or downward movement in the data.

trend

Which of the following are components in time-series data?

trend, seasonality, cycles, irregular variations, random variations

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

two or more of the most recent

Which of the following is/are disadvantages of consumer surveys? -A considerable amount of knowledge is required to correctly interpret the results for valid information. -Consumers are unable to give direct feedback to companies. -Consumer opinion may be temporarily influenced by outside factors like sales pitches. -It is difficult to get a representative sample. -It takes a long time to analyze results of a survey due to high response rates.

-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. -It is difficult to get a representative sample.

From the list of forecasting approaches identify all those that are the quantitative type.

-Associative -Time-series

Which of the following statements is true about forecasting approaches? -Associative models use explanatory variables to predict the future -Quantitative forecasts are always preferable to qualitative forecasts because the former deals with hard data -Qualitative forecasts allow personal opinions to be included in the forecast -Time-series models allow for the inclusion of human factors in the forecasting process.

-Associative models use explanatory variables to predict the future. -Qualitative forecasts allow personal opinions to be included in the forecast.

What are some commonly encountered nonlinear trend types?

-Exponential trend -Parabolic trend -Life cycle trend -Growth curve

Which of the following statements about forecasts is/are correct? -Forecasts only relate to predicting demand. -Forecasts enable managers to plan for the future -Accurate forecasts are easy to produce. -Forecasts are the basis for virtually all decisions made in a business.

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

Which of the following are true of good forecasts? -Forecasts need not be in writing. -Forecasts should be cost-effective. -Forecasts should be in meaningful (understandable) units. -Forecasts should be accurate. -Forecasts should include only the planning time and not the time to implement the change.

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

Which of the following are elements of good forecasts? -Forecasts should be easy to understand and use. -Forecast accuracy is important enough to take one's time to fine-tune the forecast as much as possible. -Forecasts should be cost-effective. -Forecasts should be reliable.

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

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 try to find a relationship between the data and another variable. -Forecasts using time series data assume that past patterns will continue in the future. -Time series only observe daily demand.

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

Which of the following is/are advantages of consumer surveys? -Surveys eliminate the possibility of irrational behavior patterns. -You can get information that may be unavailable anywhere else. -They are always reliable because the information comes directly from customers. -Consumers are able to give direct feedback to companies.

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

Steps in the forecasting process in the correct order, starting at the top.

1) determine the purpose of the forecast2) establish a time horizon3) obtain, clean, and analyze data4) select a forecasting technique5) make the forecast6) monitor the forecast

In the equations for the coefficients of a line, what is the a term?

intercept