SCMA Test #1 Ch. 4

Which of the following values of alpha would cause exponential smoothing to respond the SLOWEST to forecast errors?

0.10

Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast?

1.0

A forecasting method has produced the following over the past five months. What is the mean absolute deviation?

1.2

Given an actual demand this period of 103, a forecast value for this period of 99, and an alpha of .4, what is the exponential smoothing forecast for next period?

100.6

Demand for a certain product is forecast to be 800 units per month, averaged over all 12 months of the year. The product follows a seasonal pattern, for which the January monthly index 1.25. What is the seasonally-adjusted sales forecast for January?

1000 units

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 t 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

Suppose that the last four months of sales were 8, 10, 15, and 9 units, respectively. Suppose further that the last four forecasts were 5, 6, 11, and 12 units, respectively. What is the Mean Absolute Deviation (MAD) of these forecasts?

3.5

Given forecast errors of -1, 4, 8, and -3, what is the mean absolute deviation?

4

At time-series trend equation is 25.3 + 2.1x. What is your forecast for period 7?

40.0

What is the forecast for May using a four-month moving average?

44

Given an actual demand this period of 61, a forecast for this period of 58, and an alpha of 0.3, what would the forecast for the next period be using exponential smoothing?

58.9

Suppose that the demand in period 1 was 7 units and the demand in period 2 was 9 units. Assume that the forecast for period 1 was for 5 units. If the firm uses exponential smoothing with an alpha value of .20, what should be the forecast for period 3? (Round answers to two decimal places.)

6.12

Taco Bell's unique employee scheduling practices are partly the result of using:

A and C - point-of-scale computers to track food sales in 15 minute intervals - a six-week moving average forecasting technique

Which of the following uses three types of participants: decision makers, staff personnel, and respondents?

Delphi method

Which of the following statements about time-series forecasting is true?

It is based on the assumption that the analysis of past demand helps predict future demand.

_____ expresses the error as a percent of the actual values.

MAPE

A naive forecast of September sales of a product would be equal to the sales in August.

True

As compared to long-range forecasts, short-range forecasts:

deal with less comprehensive issues supporting management decisions

The fundamental difference between cycles and seasonality is the:

duration of the repeating patterns

The three major types of forecasts used by organizations in planning future operations are:

economic, technological, and demand

One use of short-range forecasts is to determine:

job assignments

If Brandon Edward were working to develop a forecast using a moving averages approach, but he noticed a detectable trend in the historical data, he should:

use weights to place more emphasis on recent data

Which of the following is NOT a characteristic of exponential smoothing?

weights each historical value equally

If two variables were perfectly correlated, what would the coefficient of correlation r equal?

B or C -1 or 1

What forecasting systems combine the intelligence of multiple supply chain partners?

CPFR

Which of the following is NOT a step in the forecasting process?

Eliminate any assumptions

Which of the following statements comparing exponential smoothing to the weighted moving average technique is TRUE?

Exponential smoothing typically requires less record keeping of past data.

A naive forecast for September sales of a product would be equal to the forecast for August.

False

Forecasts of individual products tend to be more accurate than forecasts of product families.

False

In a regression equation where y-hat is demand and x is advertising, a coefficient of determination (R^2) of .70 means that 70% of the variance in advertising is explained by demand.

False

In trend projection, a negative regression slope is mathematically impossible.

False

Means squared error and exponential smoothing are two measures of the overall error of a forecasting model.

False

Regression lines graphically depict "cause-and-effect" relationships.

False

The larger number of periods in the simple moving average forecasting method, the greater the method's responsiveness to changes in demand.

False

The larger the standard error of the estimate, the more accurate the forecasting model.

False

A time-series model uses a series of past data points to make the forecast.

True

A trend projection equation with a slope of 0.78 means that there is a 0.78 unit rise in Y per period.

True

Cycles and random variations are both components of time series.

True

Demand for individual products can be driven by product life cycles.

True

Demand forecasts serve as inputs to financial, marketing, and personnel planning.

True

Focus forecasting tries a variety of computer models and selects the best one for a particular application.

True

Forecasts may be influenced by a product's position in its life cycle.

True

If a forecast is consistently greater than (or less than) actual values, the forecast is said to be biased.

True

In trend projection, the trend component is the slope of the regression equation.

True

Linear-regression analysis is a straight-line mathematical model to describe the function relationships between independent and dependent variables.

True

Most forecasting techniques assume that there is some underlying stability in the system.

True

One advantage of exponential smoothing is the limited amount of record keeping involved.

True

Seasonal indices adjust raw data for patterns that repeat at regular time intervals.

True

The sales force composite forecasting method relies on salespersons' estimates of expected sales.

True

Gradual upward or downward movement of data over time is called:

a trend

Computer monitoring of tracking signals and self-adjustment if a signal passes a preset limit is characteristic of:

adaptive smoothing

Many services maintain records of sales noting:

all of the above - the day of the week - unusual events - the weather - holiday impacts

Time-series data may exhibit which of the following behaviors?

all of the above - trend - random variations - seasonality - cycles

Which of the following techniques uses variables such as price and promotional expenditure, which are related to product demand, to predict demand?

associative models

Short-range forecasts tends to ____ longer-range forecasts.

be more accurate than

Which of the following must requires long-range forecasting (as opposed to short-range or medium-range forecasting) for its planning purposes?

cash budgeting

The degree or strength of a relationship between two variables is shown by the:

coefficient of correlation

Which time-series model uses BOTH past forecasts and past demand data to generate a new forecast?

exponential smoothing

A forecast based on the previous forecast plus a percentage of the forecast error is a(n):

exponential smoothing forecast

A fundamental distinction between trend projection and linear regression is that:

in trend projection the independent variable is time; in linear regression the independent variable need not be time, but can be any variable with explanatory power

For a given product demand, the time-series trend equation is 53 - 4x. The negative sign on the slope of the question:

is an indication that product demand is declining

A six-month moving average forecast is generally better than a three-month moving average forecast if demand:

is rather stable

Yamaha manufactures which set of products with complementary demands to address seasonal variations?

jet skis and snowmobiles

The forecasting technique that pools the opinions of a group of experts or managers is known as:

jury of executive opinion

Forecasts used for new product planning, capital expenditures, facility location or expansion, and R&D typically utilize a:

long-range time horizon

The primary purpose of the mean absolute deviation (MAD) in forecasting is to:

measure forecast accuracy

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

medium-range forecast

Which of the following is not a type of qualitative forecasting?

moving average

Which time-series model below assumes that demand in the next period will be equal to the most recent period's demand?

naive approach

Which of the following is not present in a time series?

operational variations

The two general approaches to forecasting are:

qualitative and quantitative

In time series, which of the following cannot be predicted?

random variations

The tracking signal is the:

ratio of cumulative error/MAD

Increasing the number of periods in a moving average will accomplish greater smoothing, but at the expense of:

sensitivity to real changes in the data

Forecasts are usually classified by time horizon into which three categories?

short-range, medium-range, and long-range

The last four weekly values of sales were 80, 100, 105, and 90 units. The last four forecasts were 60, 80, 95, and 75 units. These forecasts illustrate:

slope

Which of the following is TRUE regarding the two smoothing constants of the Forecast Including Trend (FIT) model?

their values are determined independently

What two numbers are contained in the daily report to the CEO of Walt Disney Parks & Resorts regarding the six Orlando parks?

yesterday's forecasted attendance and yesterday's actual attendance