Module #4
Which forecasting method places equal weight on past observations? Causal Exponential smoothing Weighted moving average Moving average
moving average
If forecast error is negative, then the forecast was too _____. low high
high
In an exponential smoothing model, alpha can take on any value between ______. 0 and 10 0 and 1 -1 and 1 -1 and 0
0 and 1
Given a sample of weekly sales data of 15, 5, 10, and 10, what is the four-period moving average sales forecast for the next week? 10 15 40 5
10
Given a sample of weekly sales data of 12, 18, 14, and 16, what is the four-period moving average sales forecast for the next week? 12 15 60 18
15
Given a sample of weekly sales data of 12, 18, 14, and 16, what is the four-period moving average sales forecast for the next week? 15 60 18 12
15
Given a sample of weekly sales data of 8, 10, 8, and 10, what is the four-period moving average sales forecast for the next week? 9 36 8 10
9
Some measures of forecast accuracy include the running sum of forecast errors, the mean absolute percentage error, and mean forecast error. The formula for each is dependent on the forecast error, which is calculated by using the equation: Actual demand for period t minus the forecasted demand for period t The average of actual demand for period t and forecasted demand for period t Actual demand for period t divided by the forecasted demand for period t Actual demand for period t plus the forecasted demand for period t
Actual demand for period t minus the forecasted demand for period t
___________ is a concept that encourages and facilitates collaborative processes between members of a supply chain. S&OP CPFR both a & b neither a nor b
CPFR
If the forecasts on average are too high, RSFE and MFE will be _______. positive negative
negative
Methods used to forecast the introduction of a new product normally include: I. Delphi method II. Judgmental method III. Poll method III only I only II & III I & II
I & II
Based on the table below, which product's forecast indicates the lowest magnitude of forecast error? Product (MAPE) (MFE) A 8% 650 B 20% 675 C 19% 405 D 17% 500 Product A Product B Product C Product D
Product A
When promotions exist in demand data, forecasters may respond by ______________. filtering out the promotions estimating what demand would have been without the promotion ignoring it because the overall level of demand is constant and that is most important a or b. a or b or c
a or b
Firms that practice S&OP with discipline are likely to experience higher levels of _____________ relative to firms with weak undisciplined implementation. order fill rate gross margin customer retention all of the above none of the above
all of the above
The costs associated with prediction error can be substantial. Which of the following is a potential cost: Lost sales Safety stock Dissatisfied customers All of the above None of the above
all of the above
An organization has developed three alternate sales and operations plans for the coming six months and now must choose between them. They should consider: how their plan will impact supply chain partners. All of these are good criteria for a sales and operation plan. how flexible the plan is. what the cash flows are like
all of these are good criteria for a sales and operations plan
Sales and operations planning should consider: All of these must be considered when performing S&OP capabilities of suppliers. customer demand. capabilities of logistics service providers
all of these must be considered when performing S&OP
Which of the following is an example of noise in demand data? an unexplained decrease in sales of bottled water on the hottest day of the year. a change in demand due to a product becoming more popular with consumers a change in demand due to holiday sales a spike in demand due to a promotion
an unexplained decrease in sales of bottled water on the hottest day of the year
Forecast error is expected to decrease ___________________. as the planning horizon increases with greater variation in the lead times as the planning horizon decreases regardless of whether the planning horizon increases or decreases
as the planning horizon decreases
Forecast ____________ describes whether we are on average forecasting too high or low. Bias Magnitude
bias
Forecast ____________ describes whether we are on average forecasting too high or low. Bias Magnitude
bias
The RSFE and MFE are used to measure ______ in forecast error. bias standard deviation magnitude error
bias
Forecast ______ describes whether we are on average forecasting too high or low while forecast _______ measures the size of the forecast error, irrespective of the ___________ of the error. magnitude, bias, direction direction, bias, magnitude bias, magnitude, direction magnitude, direction, bias
bias, magnitude, direction
Which forecast error metric is used to measure forecast error magnitude? Mean forecast error (MFE) Mean absolute percent error (MAPE) Standard deviation of forecast error Running sum for forecast error (RSFE) both b and c
both b and c
Assume two SKUs have the same MAPE. Must they also have the same standard deviation of forecast error? Yes No
no
Extended lead times _________ agility and flexibility enhance contribute to enable all of the above none of the above
none of the above
Noise is random variation in demand that ______. can be explained cannot by explained are explained by trend are explained by seasonality
cannot be explained
A forecast is known to be unbiased. The magnitude must then _____. have a large magnitude of error have zero magnitude of error cannot tell what magnitude would be from the bias. have a low magnitude of error
cannot tell what magnitude would be from bias
Which is NOT a disadvantage of causal models relative to time series models? causal models require more expertise causal models require input from multiple forecasters causal models may require estimation of the independent variable causal models require more data
causal models require input from multiple forecasters
Two major classifications of quantitative forecasting methods are _______ and ________ models. poll; causal causal; time series judgmental, causal Delphi; time series
causal; time series
Which is NOT a component of the logistics lead time? manufacturing time delivery time procurement time customer's order cycle time
customer's order cycle time
This question is part of what S&OP process: "If there were no constraints from the supply side, what could we actually sell?" Supply Review Preparation Demand review Consensus Executive review
demand review
As the prediction error increases, safety stock costs ______________. do not change decrease increase
increase
Adjusting last period's forecast by a fraction of last period's forecast _______ is called exponential smoothing. error data values average
error
Adjusting last period's forecast by a fraction of last period's forecast error is called _______. Mean Forecast Error Mean Square Error exponential smoothing Moving average
exponential smoothing
Adjusting last period's forecast by a fraction of last period's forecast error is called _______. Mean Square Error Moving average Mean Forecast Error exponential smoothing
exponential smoothing
CPFR is a process to integrate the ______ and ________ processes between suppliers and retailers. demand; supply forecasting; replenishment sales; demand assumptions sales; demand forecasting
forecasting; replenishment
Logistics lead time is the time ________________. from when an order is placed until it's actually received and ready for use or sale that a customer is willing to wait for delivery of an anticipated purchase from when an order is manufactured until it's in the customer's hands all of the these
from when an order is placed until it's actually received and ready for use or sale
Time series methods are is quantitative methods based on assumption that ______ demand is reflected in _________ demand patterns. future; present future; future present; past future; past
future; past
Time series methods are is quantitative methods based on assumption that ______ demand is reflected in _________ demand patterns. present; past future; past future; present future; future
future; past
If the RSFE or MFE is negative, then on average the forecasts are too ______. low high
high
A __________ alpha in exponential smoothing is like having a moving average with very few periods. A ____ alpha in exponential smoothing is having lots of periods in a moving average. low; low high; low low; high high; high
high; low
As the planning horizon increases, forecast error is expected to ________________. increase be about the same decrease go towards zero
increase
To make a weighted moving average forecast model less responsive, the forecaster should _____________________. decrease the number of periods included increase the number of periods included use a lower alpha place higher weight on more recent periods
increase the number of periods included
As the number of periods included in a moving average forecast model _______, the forecast becomes ________________ stable. increases, less decreases, more increases; more
increase; more
To increase stability in forecasts, the number of periods in a moving average should be increased decreased averaged smoothed exponentially
increased
As supply chains become longer, supply uncertainty _____________. increases decreases levels out become irrelevant a & d
increases
The Delphi method is a(n) ______ method of forecasting. iterative non iterative quantitative causal
iterative
Bob is really good at forecasting demand for televisions, but he couldn't tell you how he does it, exactly. The ____________ method would be a good approach for helping Bob quantify his method. crowd-source judgment capturing polling Delphi
judgment capturing
Subjective ways of using quantitative methods to extract quantitative models is called _______. causal method Delphi method judgment capturing poll method
judgment capturing
Assume the two SKUs have the same MAPE. However, SKU A has a lower standard deviation of forecast error than SKU B. All other things being equal, we would carry ______ safety stock for SKU A. more less about the same cannot tell from the information given
less
When there is too much noise in the data, the only component of demand that can be estimated is the_______ of demand. cyclicality trend level seasonality
level
Procurement time, manufacturing time and delivery time are components of _______. policy capturing lead time gap logistics Lead time moving average
logistics lead time
Causal models might best be used for ______ forecasting while time series model are mostly used for ________ forecasting. short term, short term long term; long term short term; Long term long term; short term
long term; short term
Causal models might best be used for ______ forecasting while time series model are mostly used for ________ forecasting. short term; Long term long term; short term short term, short term long term; long term
long term; short term
If the RSFE or MFE is positive, then on average the forecasts are too ______. low high
low
MAPE is used to measure forecast error __________ Bias Magnitude Safety stock both a and b
magnitude
The fundamental purpose of an S&OP process is to __________________________. refine the sales forecast. match supply and demand reduce inventory eliminate lost sales
match supply and demand
The measure of forecast error where the average absolute error of each forecast is shown as a percentage of actual demand is mean absolute percent error (MAPE). running sum of forecast error (RSFE). mean forecast error (MFE). bias.
mean absolute percentage error
Calculating the __________ means taking the running sum of the forecast errors and dividing it by the number of observations or the number of forecasts. standard deviation of forecast error mean forecast error mean square error mean absolute deviation
mean forecast error
Which forecast error metric is commonly used because it can be easily used for comparability of forecast errors across different product lines? Running sum of forecast error (RSFE) Mean forecast error (MFE) Mean square error (MSE) Mean absolute percent error (MAPE)
mean forecast error
A CPFR program allows a producer to determine replenishment quantities in concert with a retailer and thereby remove redundant inventory and improve customer service. This activity likely ______________. worsens the bullwhip effect mitigates the bullwhip effect has no effect on the bullwhip none of the above
mitigates the bullwhip effect
As the number of periods included in a moving average forecast model decreases, the forecast becomes ___________ responsive. More Less Equally
more
As the number of periods included in a moving average forecast model increases, the forecast becomes ________________ stable. More Less Equally
more
Julie is estimating demand for a future period using a time series model. She sums the demand for the past three periods and then divides that sum by 3. Julie is using the ___________ method. exponential smoothing moving average weighted moving average Causal
moving average
Based on the table below, which product's forecast indicates the lowest magnitude of forecast error? Product (MAPE) (MFE) A 14% 300 B 10% 210 C 6% 525 D 14% 500 Product D Product A Product C Product B
product C
Based on the table below, which product's forecast is the least biased? Product (MAPE) (MFE) Std A 4% 435 47,449 B 13% 525 53,675 C 8% 405 44,722 D 16% 500 51,191 Product D Product C Product B Product A
product C
Based on the table below, which product's forecast is the least biased? Product (MAPE) (MFE) SDFE A 8% 650 68,486 B 20% 675 70,520 C 19% 405 42,445 D 17% 500 52,232 (product-mean absolute percent error- mean forecast error- standard deviation of forecast error) Product D Product A Product B Product C
product C
Based on the table below, which product's forecast is the least biased? Product (MAPE) (MFE) (SDFE) A 10% 650 67,638 B 8% 640 57,160 C 24% 785 81,797 D 12% 630 68,923 (product- Mean Absolute Percent Error-Mean Forecast Error- Standard Deviation of Forecast Error) Product B Product D Product A Product C
product D
Market research is a _________ kind of forecasting method. time series qualitative quantitative causal
qualitative
Policy capturing or judgment capturing are subjective ways of using _______ methods to extract quantitative models. time series Delphi quantitative qualitative
qualitative
Which type of forecasting methods are more subjective? Quantitative Qualitative
qualitative
A purpose of the consensus meeting is to _______________________. Align the sales and demand planning forecast Quantify the gap between supply and demand Gather demand assumptions Make a decision about how to proceed
quantify the gap between supply and demand
Which forecast error metric is used in the traditional calculation of safety stock in automated systems? Standard deviation of forecast error Running sum of forecast error (RSFE) Mean absolute percent error (MAPE) Mean forecast error (MFE)
standard deviation of forecast error
The lead time gap is defined as the difference between the logistics lead time and __________. the delivery lead time the manufacturing lead time the number of days per year the customer's order cycle
the customer's order cycle
The lead time gap is defined as the difference between ________ and the customer's order cycle. the manufacturing lead time the logistics lead time the procurement lead time and the delivery lead time
the logistics lead time
In pantry loading, the rate of consumption is ______, but the frequency of purchase is reduced more less the same none of the above
the same
Moving average is one of the simplest ____________ used for forecasting. time series models judgmental models causal models Delphi models
times series model
Which component of demand represents the degree to which the data is increasing or decreasing over time? Trend Level Cyclicality Seasonality
trend
