CH 3

Which of the following is not a reason why exponential smoothing has been well accepted?

Formulating the model is relatively difficult.

When a consistent mistake is made in a forecast, this is classified as ___________ error.

bias

Market research uses data collection methods that are primarily ___________________.

surveys and interviews

What is the term for forecasts used for making day-to-day decisions about meeting demand?

tactical forecast

What is the first step in CPFR?

Creation of a front-end partnership agreement

Which qualitative technique develops a forecast by polling participants multiple times on expected forecasts?

Delphi method

Which of the following is not an example of a qualitative forecasting technique?

Gamma Method

Which of the following are examples of qualitative forecasting?

Market Research Panel Consensus

True or false: Historical analogies are useful for forecasting new products with similar growth patterns and concepts of previous products.

TRUE

Which of the four basic types of forecasting assumes that data about past demand can be used to predict future demand?

Time Series Analysis

The difference between the actual demand and the forecast is referred to as

forecast error.

Exponential smoothing constants must be given a value between?

0 and 1

The forecast for last period was 100 units. Actual demand was 110 units. What was the forecast error?

10 units

When a consistent mistake is made in a forecast, this is classified as ___________ error.

BIAS

Using the number of cars passing by a restaurant to predict sales is an example of which type of forecasting?

Causal Relationship Forecasting

Which forecasting model incorporates independent variables other than time to predict future demand?

Causal relationship

The ----------method conceals the identity of participates and gives every participant the same influence.

Delphi

Place the steps of the decomposition using least squares regression process into chronological order.

Determine the seasonal factor 2. Deseasonalize the original data 3. Develop a regression line for the deseasonalized data 4. Project the regression line over the forecast period 5. Adjust the regression line using the seasonal factor.

Point-of-sale (POS) data would be used in which step of the CPFR process?

Development of demand forecasts

When releasing a new product that is similar to an existing product, one could use which qualitative technique to develop a forecast?

Historical Analogy

What is the major restriction in linear regression forecasting?

It assumes that projections will fall in a straight line.

Which measurement of error represent the average error measured as a percentage of average demand

MAPE

Which measurement of error represent the average error measured as a percentage of average demand?

MAPE

A qualitative forecasting technique that is useful for identifying what consumers like and dislike about a product is _______________.

MARKET RESEARCH

When considering more than one variable, along with the effects of each variable on the item of interest, which forecasting model should be used?

Multiple Regression

Which of the following statements about multiple regression analysis are true?

Multiple regression requires gathering more data than is necessary for exponential smoothing forecasts. Microsoft Excel supports multiple regression analysis. Multiple regression is appropriate when there are several important factors influencing a variable of interest.

Which qualitative forecasting technique is based upon the idea that a group of people with various backgrounds can develop a more reliable forecast than a narrower group?

Panel Consensus

When decomposing a time series into its components, you do all of the following except:

Project trend component into the future.

Which component of demand reflects the effects of chance events?

Random Variation

What type of forecast should be used for strategy, sourcing, and location decisions?

Strategic Strategic forecasts are medium- and long-term forecasts used for decisions related to strategy and aggregate demand.

All of the following are reasons why exponential smoothing has become well accepted EXCEPT:

Tests for accuracy are difficult

Jenna believes that more recent data should be given more significance than older data. Which forecasting model should she select?

Weighted Moving Average "Reason: A weighted moving average generally gives more significance to more recent data."

Bias errors occur when _____.

a forecast is consistently too high (or too low).

Mean absolute percent error (MAPE) represents the average error as

a percentage of average demand.

A moving average forecast is based on

average past demand

The smoothing constant values depend on which of the following? 1. How much random variation there is in demand. 2. How steady the trend factor is.

both 1 and 2

A simple moving average gives _____________ weight to each component of the forecast; whereas a weighted moving average gives ___________ weight to each element.

equal; varying

Mean absolute percent error (MAPE) is calculated as

MAPE = MAD / AVERAGE DEMAND

In business forecasting, what time frame usually refers to three months to two years?

medium

The weighted moving average allows _______ data to be given more significance than _________ data.

recent; older

The difficulty with using a panel consensus is that lower-level employees may be intimidated by higher levels of management.

true

One way to overcome the major restriction of linear regression forecasting is to

use a shorter period of history to prepare the forecast.