Chapter 3 Forecasting Flashcards
In time series data depicting demand which of the following is not considered a component of demand variation?
A. Trend
B. Seasonal
C. Cyclical
D. Variance
E. Autocorrelation
Which of the following is not one of the basic types of forecasting?
A. Qualitative
B. Time series analysis
C. Causal relationships
D. Simulation
E. Force field analysis
In most cases, demand for products or services can be broken down into several components. Which of the following is not considered a component of demand?
A. Average demand for a period
B. A trend
C. Seasonal elements
D. Past data
E. Autocorrelation
In most cases, demand for products or services can be broken into several components. Which of the following is considered a component of demand?
A. Cyclical elements
B. Future demand
C. Past demand
D. Inconsistent demand
E. Level demand
In most cases, demand for products or services can be broken into several components. Which of the following is considered a component of demand?
A. Forecast error
B. Autocorrelation
C. Previous demand
D. Consistent demand
E. Repeat demand
Which of the following forecasting methodologies is considered a qualitative forecasting technique?
A. Simple moving average
B. Market research
C. Linear regression
D. Exponential smoothing
E. Multiple regression
Which of the following forecasting methodologies is considered a time series forecasting technique?
A. Simple moving average
B. Market research
C. Leading indicators
D. Historical analogy
E. Simulation
Which of the following forecasting methodologies is considered a time series forecasting technique?
A. Delphi method
B. Exponential averaging
C. Simple movement smoothing
D. Weighted moving average
E. Simulation
Which of the following forecasting methodologies is considered a causal forecasting technique?
A. Exponential smoothing
B. Weighted moving average
C. Linear regression
D. Historical analogy
E. Market research
Which of the following forecasting methods uses executive judgment as its primary component for forecasting?
A. Historical analogy
B. Time series analysis
C. Panel consensus
D. Market research
E. Linear regression
Which of the following forecasting methods is very dependent on selection of the right individuals who will judgmentally be used to actually generate the forecast?
A. Time series analysis
B. Simple moving average
C. Weighted moving average
D. Delphi method
E. Panel consensus
In business forecasting, what is usually considered a short-term time period?
A. Four weeks or less
B. More than three months
C. Six months or more
D. Less than three months
E. One year
In business forecasting, what is usually considered a medium-term time period?
A. Six weeks to one year
B. Three months to two years
C. One to five years
D. One to six months
E. Six months to six years
In business forecasting, what is usually considered a long-term time period?
A. Three months or longer
B. Six months or longer
C. One year or longer
D. Two years or longer
E. Ten years or longer
In general, which forecasting time frame compensates most effectively for random variation and short term changes?
A. Short-term forecasts
B. Quick-time forecasts
C. Long range forecasts
D. Medium term forecasts
E. Rapid change forecasts
In general, which forecasting time frame best identifies seasonal effects?
A. Short-term forecasts
B. Quick-time forecasts
C. Long range forecasts
D. Medium term forecasts
E. Rapid change forecasts
In general, which forecasting time frame is best to detect general trends?
A. Short-term forecasts
B. Quick-time forecasts
C. Long range forecasts
D. Medium term forecasts
E. Rapid change forecasts
Which of the following forecasting methods can be used for short-term forecasting?
A. Simple exponential smoothing
B. Delphi technique
C. Market research
D. Hoskins-Hamilton smoothing
E. Serial regression
Which of the following considerations is not a factor in deciding which forecasting model a firm should choose?
A. Time horizon to forecast
B. Product
C. Accuracy required
D. Data availability
E. Analyst availability
The exponential smoothing method requires which of the following data to forecast the future?
A. The most recent forecast
B. Precise actual demand for the past several years
C. The value of the smoothing constant delta
D. Overall industry demand data
E. Tracking values
If a firm produced a standard item with relatively stable demand, the smoothing constant alpha (reaction rate to differences) used in an exponential smoothing forecasting model would tend to be in which of the following ranges?
A. 5 % to 10 %
B. 20 % to 50 %
C. 20 % to 80 %
D. 60 % to 120 %
E. 90 % to 100 %
If a firm produced a product that was experiencing growth in demand, the smoothing constant alpha (reaction rate to differences) used in an exponential smoothing forecasting model would tend to be which of the following?
A. Close to zero
B. A very low percentage, less than 10%
C. The more rapid the growth, the higher the percentage
D. The more rapid the growth, the lower the percentage
E. 50 % or more
Which of the following is a possible source of bias error in forecasting?
A. Failing to include the right variables
B. Using the wrong forecasting method
C. Employing less sophisticated analysts than necessary
D. Using incorrect data
E. Using standard deviation rather than MAD
Which of the following are used to describe the degree of error?
A. Weighted moving average
B. Regression
C. Moving average
D. Forecast as a percent of actual
E. Mean absolute deviation
If you were selecting from a variety of forecasting models based on MAD, which of the following MAD values from the same data would reflect the most accurate model?
A. 0.2
B. 0.8
C. 1.0
D. 10.0
E. 100.0
A company has a MAD of 10. Its wants to have a 99.7 percent control limits on its forecasting system. It’s most recent tracking signal value is 3.1. What can the company conclude from this information?
A. The forecasting model is operating acceptably
B. The forecasting model is out of control and needs to be corrected
C. The MAD value is incorrect
D. The upper control value is less than 20
E. It is using an inappropriate forecasting methodology
You are hired as a consultant to advise a small firm on forecasting methodology. Based on your research you find the company has a MAD of 3. Its wants to have a 99.7 percent control limits on its forecasting system. It’s most recent tracking signal value is 15. What should be your report to the company?
A. The forecasting model is operating acceptably
B. The forecasting model is out of control and needs to be corrected
C. The MAD value is incorrect
D. The upper control value is less than 20
E. The company is using an inappropriate forecasting methodology
Heavy sales of umbrellas during a rain storm is an example of which of the following?
A. A trend
B. A causal relationship
C. A statistical correlation
D. A coincidence
E. A fad
