Ops Mgmt Exam #3 - Chap 14 MC

Which statement about forecast accuracy is TRUE?

A manager must be careful not to "overfit" past data.

Which of the following statements regarding time-series methods is FALSE?

A simple moving average of three periods is identical to exponential smoothing with an alpha equal to 0.33.

Which one of the following statements is TRUE?

For projections of more stable demand patterns without trends, seasonal influences, or cyclical influences, use larger values of n in the simple moving-average approach.

Which one of the following statements about forecasting is TRUE?

Judgment methods are particularly appropriate for situations in which historical data are lacking.

Assume that a time-series forecast is generated for future demand and subsequently it is observed that the forecast method did not accurately predict the actual demand. Specifically, the forecast errors were found to be: Mean absolute percent error = 10% Cumulative sum of forecast errors = 0 Which one of the statements concerning this forecast is TRUE?

The forecast has no bias but has a positive standard deviation of errors.

Which one of the following statements about forecasting is FALSE?

The method for incorporating a trend into an exponentially smoothed forecast requires the estimation of three smoothing constants: one for the mean, one for the trend, and one for the error.

A linear regression model is developed that has a slope of -2.5 and an intercept of 10. The sample coefficient of determination is 0.50. Which of the following statements is TRUE?

The sample correlation coefficient must be -0.707.

) Which one of the following statements about the patterns of a demand series is FALSE?

The trend, over an extended period of time, always increases the average level of the series.

Which one of the following statements about forecasting is FALSE?

Time series express the relationship between the factor to be forecast and related factors such as promotional campaigns, economic conditions, and competitor actions.

Which one of the following statements about forecasting is FALSE?

You should use the simple moving-average method to estimate the mean demand of a time series that has a pronounced trend and seasonal influences.

A tracking signal greater than zero and a mean absolute deviation greater than zero imply that the forecast has:

a nonzero amount of bias and a nonzero amount of forecast error variability

When the underlying mean of a time series is very stable and there are no trend, cyclical, or seasonal influences:

a simple moving-average forecast with n = 20 should outperform a simple moving-average forecast with n = 3

It would be most appropriate to combine a judgment approach to forecasting with a quantitative approach by:

adjusting a forecast up or down to compensate for specific events not included in the quantitative technique.

A forecasting system that brings the manufacturer and its customers together to provide input for forecasting is a(n):

collaborative planning, forecasting, and replenishment system.

Andy took what he liked to call "the sheriff without a gun" approach to forecasting. Every period he tried a number of different forecasting approaches and simply averaged the predictions for all of the techniques. This overall average was the official forecast for the period. The more formal name for this technique is:

combination forecasting.

Which one of the following is most useful for measuring the bias in a forecast?

cumulative sum of forecast errors

Which one of the following basic patterns of demand is difficult to predict because it is affected by national or international events or because of a lack of demand history reflecting the stages of demand from product development to decline?

cyclical

There are historically three 32-month periods of generally rising prices in the stock market for every one 9-month period of falling prices. This observation leads you to conclude that the stock market exhibits a:

cyclical pattern

When forecasting total demand for all their services or products, few companies err by more than:

five to eight percent.

Barney took what he liked to call "the shotgun approach" to forecasting. Every period he tried a number of different forecasting approaches and at the end of the period he reviewed all of the forecasts to see which was the most accurate. The winner would be used for next period's forecast (but he still made forecasts all possible ways so he could use the system again for the following period). The more formal name for this technique is:

focus forecasting.

Using salesforce estimates for forecasting has the advantage that:

forecasts of individual sales force members can be easily combined to get regional or national sales totals.

The electricity bill at Padco was driven solely by the lights throughout the office; everything else was driven by alternative energy sources. The office was open roughly 8 hours a day, five days a week and the cleaning crew spent about the same amount of time in the offices each week night. The kilowatt hour usage for the office was best described as a:

horizontal demand pattern.

The Delphi method of forecasting is useful when:

judgment and opinion are the only bases for making informed projections

Which one of the following is an example of causal forecasting technique?

linear regression

The judgment methods of forecasting are to be used for purposes of:

making adjustments to quantitative forecasts due to unusual circumstances

The manufacturer developed and tested a questionnaire, designed to assist them in gauging the level of acceptance for their new product, and identified a representative sample as part of their:

market research.

The local building supply store experienced what they considered to be irregular demands for lumber after the devastating hurricane season. These unusual data points were considered:

nonbase data.

Which word best describes forecasting?

process

Polly Prognosticator was the greatest quantitative forecaster in recorded history. A skillful user of all techniques in your chapter on forecasting, she knew better than to try and develop a forecast for data that exhibited a:

random pattern

One aspect of demand that makes every forecast inaccurate is:

random variation

Professor Willis noted that the popularity of his office hours mysteriously rose in the middle and the end of each semester, falling off to virtually no visitors throughout the rest of the year. The demand pattern at work is:

seasonal

With the multiplicative seasonal method of forecasting:

seasonal factors are multiplied by an estimate of average demand to arrive at a seasonal forecast.

The number of #2 pencils the bookstore sells appears to be highly correlated with the number of student credit hours each semester. The bookstore manager wants to create a linear regression model to assist her in placing an appropriate order. In this scenario:

the independent variable is student credit hours

A forecaster that uses a holdout set approach as a final test for forecast accuracy typically uses:

the older observations in the data set to develop the forecast and more recent to check accuracy.

A regression equation with a coefficient of determination near one would be most likely to occur when the data demonstrated a:

trend demand pattern