ch 3- operations mgmt

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. -It is difficult to compute. -It is complicated to explain. -Random variations are smoothened out, making structural patterns less evident.

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

Which of the following are components in time-series data? -Seasonality -Cycles -Trend -Irregular variation -Random variation -outside forces -competitors' actions -market conditions

-Seasonality -Cycles -Trend -Irregular variation -Random variation

Which of the following are ways to improve forecast accuracy?

-Shorten the lead time of responding to forecasts. -Shorten the forecasting time horizon. -Increase the flexibility of operations. -Maintain accurate and up-to-date information.

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

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

Which of the following are considerations to be taken into account when choosing a forecasting technique?

-The availability of data. -The type of data. -The accuracy of the method.

Bias is the persistent tendency for forecasts to do what?

Be greater or less than the actual values

Which of the following statements is correct?

Both forecast accuracy and cost are important factors to consider in choosing a forecasting method.

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

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

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

Ft= Ft-1+a(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=1)n(subscript of sigma)*(At−i)/n

Which of the following is a major weakness of the tracking signal approach?

Its use of cumulative errors

Forecasts that use subjective inputs such as opinions from consumer surveys, sales staff, managers, executives, and experts.

Judgmental forecasts

Which of the following is the correct formula for MAD?

MAD = Σ∣∣Actualt-Forecastt∣∣n

Which is the correct interpretation for MAD?

MAD represents the average absolute forecast error.

Which of the following is the correct formula for MAPE?

MAPE=∑|Actualt−Forecastt|ActualtX100n

Which is the correct interpretation of MSE?

MSE is the average squared forecast error.

Forecasts are the basis for many decisions and an essential input for what?

Matching supply with demand

Which of the following represents an error of zero on a control chart?

The center line

In the context of using salesforce opinion for forecasting, which of the following statements is true about 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. -They can be performed to a high degree of accuracy. -They are used for day-to-day operations.

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

Forecasting technique that uses explanatory variables to predict future demand.

associative model

A tracking signal compares the cumulative forecast error to the MAD in order to detect any ______ in errors over time

bias

Which of the following is the correct formula for forecast error in period t?

et=At-Ft

True or false: The tracking signal method looks for bias in the forecast and is therefore preferred to the control chart method of monitoring forecast errors.

false

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

greater

The Delphi Method is an _____ process which seeks to find a ______ forecast.

iterative; consensus

Executive opinions are generally used for what type of forecasts?

long-range

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

A value of zero (0) for a tracking signal indicates _

no bias in the forecast

Short-term forecasts pertain to ongoing _____ . Long-term forecasts are an important _______ planning tool.

operations; strategic

Which of the following statements about time-series data is/are always true? -Forecasts using time series data assume that past patterns will continue in the future. -Time series are observed at regular intervals. -Time series only observe daily demand. -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 are observed at regular intervals.

Which of the following statements is NOT true about forecasts?

-If done carefully, forecasts very rarely are inaccurate.

Which of the following are implications of accurate short-term forecasts?

-Increased profits through improved operations.-Greater credibility throughout the organization. -Increased confidence, which would allow the diversion of resources to longer-term planning.

Identify the true statements about the weighted moving average forecast

-It involves the use of trial and error to find a suitable weighting scheme. -The weights must sum to 1.00.

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

-It is easy to understand. -It is easy to compute.

Which of the following is/are advantages of the weighted moving average forecast? -It is more reflective of the most recent occurrences. -It gives more recent values higher weight. -It gives equal weight to all values. -It does not require trial and error to find a suitable weighting scheme.

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

Which of the following is used to calculate the standard deviation of the distribution of errors?

s = sqtMSE

As a forecasting tool, the Delphi method is useful for what type of forecasting?

technological forecasting

What is plotted on a control chart?

the errors

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

Forecasts are the basis of an organization's schedules.

true

The two most important aspects of a forecast are the expected level of demand and the degree of accuracy that can be assigned to the forecast.

true

True or False: Forecasts covering a shorter time horizon tend to be more accurate than long-term forecasts.

true

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

two or more of the most recent

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

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

Which of the following statements about forecast error is/are true?

- Forecast error is the difference between the actual and predicted values in a given period. - Negative errors occur when the forecast is too high. - Positive errors occur when the forecast is too low.

Which of the following are possible sources of forecast errors?

- Random variation - Incorrect forecasting method or interpretation - Changes in the variables or relationships - Irregular variations

Which of the following are considerations to be taken into account when choosing a forecasting technique?

- The availability of computer software. - The cost of the method. - The availability of data.

Which of the following situations signify that a forecasting method may need to be adjusted or changed?

-A change or shift in the variable that the model cannot deal with -The omission of an important variable -The appearance of a new variable

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

Which of the following is/are the disadvantages of using consumer surveys for forecasting? -Consumer opinion may be temporarily influenced by outside factors like sales pitches. -There is no way to identify all potential customers. -A considerable amount of knowledge is required to correctly interpret the results for valid information. -It takes a long time to analyze results of a survey due to high response rates -Consumers are unable to give direct feedback to companies.

-Consumer opinion may be temporarily influenced by outside factors like sales pitches. -There is no way to identify all potential customers. -A considerable amount of knowledge is required to correctly interpret the results for valid information.

Which of the following statements about exponential smoothing forecasts is/are true?

-Each new forecast is adjusted based on the percentage error in the previous forecasting. -It is a sophisticated weighted averaging method.

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

-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 should be cost-effective. -Forecasts should be in meaningful (understandable) units. -Forecasts should be accurate. -Forecasts need not be in writing. -Forecasts should include only the planning time and not the time to implement the change.

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

Which of the following are elements of good forecasts? -Forecasts should be reliable. -Forecasts should be easy to understand and use. -Forecasts should be cost-effective. -Forecasts should not have any degree of error.

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

Which of the following statements about the steps in the forecasting process are true? -The forecast may not perform as desired, so it is necessary to monitor the process. -It is important to first determine the purpose of the forecast. -Once the data is obtained, the next step is to establish a time horizon. -After the purpose of the forecast is determined, the next step is to select the forecasting technique.

-The forecast may not perform as desired, so it is necessary to monitor the process. -It is important to first determine the purpose of the forecast.

In the context of using salesforce opinion for forecasting, identify true statements about salesforce opinions as a source of information for the forecast. -The salesforce is less likely to be able to distinguish between what customers would like to do and what they actually will do. -The salesforce is often aware of any plans the customers may be considering for the future. -The salesforce is likely to undermine the recent trends in demand -The salesforce is a good, unbiased source of information about customers' long-term wants and needs.

-The salesforce is less likely to be able to distinguish between what customers would like to do and what they actually will do. -The salesforce is often aware of any plans the customers may be considering for the future.

Which of the following statements are true about starting exponential smoothing forecasts? -Use an average of several values to start off the initial forecast for the forecast series. -Use a naive forecast for F2 to start off the forecast series. -To forecast for period t, pick an arbitrary value for Ft-1.

-Use an average of several values to start off the initial forecast for the forecast series. -Use a naive forecast for F2 to start off the forecast series.

Which of the following is/are advantages of consumer surveys? -You can get information that may be unavailable anywhere else. -Consumers are able to give direct feedback to companies. -You do not have to deal with the possibility of irrational behavioral patterns. -Information obtained from surveys can be easily interpreted.

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

Identify the correct formula to determine the upper control limit of a control chart to monitor the forecast.

0+zMSE

Put the steps in the forecasting process in the correct order, starting at the top. (Place the first step at the top.) -obtain, clean, and analyze data -make the forecast -monitor the forecast -determine purpose of forecast -establish a time horizon -select a forecasting technique

1) determine the purpose of the forecast 2) establish a time horizon 3) obtain, clean, and analyze data 4) select a forecasting technique 5) make the forecast 6) monitor the forecast

What limits are typically used with the tracking signal?

4+-