Ch. 4 Assignment

A forecasting method has produced the following over the past five months. What is the mean absolute deviation? Actual Forecast Error |Error| 10 11 -1 1 8 10 -2 2 10 8 2 2 6 6 0 0 9 8 1 1

1.2 add up the absolute value of the errors and divide by the number of periods (1 + 2 + 2 + 0 + 1)/5

Which of the following is NOT a type of qualitative forecasting? a) executive opinions b) consumer surveys c) sales force composites d) moving average e) the Delphi method

d) moving average

Time series data may exhibit which of the following behaviors? a) trend b) cycles c) random variations d) seasonality e) They may exhibit all of the above.

e) they may exhibit all of above

The three major types of forecasts used by business organizations are

economic, technological, and demand

A forecast with a time horizon of about 3 months to 3 years is typically called a

medium-range forecast

The two general approaches to forecasting are

qualitative and quantitative

John's House of Pancakes uses a weighted moving average method to forecast pancake sales. It assigns a weight of 5 to the previous month's demand, 3 to demand two months ago, and 1 to demand three months ago. If sales amounted to 1000 pancakes in May, 2200 pancakes in June, and 3000 pancakes in July, what should be the forecast for August?

2511 1000+(2200x3)+(3000x5)/9 = 2511

A time series trend equation is 25.3 + 2.1 X. What is your forecast for period 7?

40.0 25.3 + 2.1 (7) = 40

What is the approximate forecast for May using a four-month moving average? Nov. Dec. Jan. Feb. Mar. April 39 36 40 42 48 46

44 (46 + 48 + 42 + 40)/4

Which of the following is NOT a step in the forecasting process? a) Eliminate any assumptions. b) Determine the use of the forecast. c) Determine the time horizon. d) Select forecasting model. e) Validate and implement the results.

a) eliminate any assumptions