question

Forecasting techniques generally assume an existing causal system that will continue to exist in the future.

answer

True

question

For new products in a strong growth mode, a low alpha will minimize forecast errors when using exponential smoothing techniques.

answer

False

question

Forecasts for groups of items tend to be less accurate than forecasts for individual itemsbecause forecasts for individual items don't include as many influencing factors.

answer

False

question

Organizations that are capable of responding quickly to changing requirements can use a shorter forecast horizon and therefore benefit from more accurate forecasts.

answer

True

question

Time series techniques involve identification of explanatory variables that can be used to predict future demand.

answer

False

question

The Delphi approach involves the use of a series of questionnaires to achieve a consensus forecast.

answer

True

question

The naive forecast can serve as a quick and easy standard of comparison against which to judge the cost and accuracy of other techniques.

answer

True

question

An advantage of a weighted moving average is that recent actual results can be given more importance than what occurred a while ago.

answer

True

question

The sample standard deviation of forecast error is equal to the square root of MSE.

answer

True

question

The use of a control chart assumes that errors are normally distributed about a mean of zero.

answer

True

question

Bias exists when forecasts tend to be greater or less than the actual values of time series.

answer

True

question

The best forecast is not necessarily the most accurate.

answer

True

question

A proactive approach to forecasting views forecasts as probable descriptions of future demand, and requires action to be taken to meet that demand.

answer

False

question

In exponential smoothing, an alpha of .30 will cause a forecast to react more quickly to a large error than will an alpha of .20

answer

True

question

Forecasts based on judgment and opinion don't include

answer

Second opinions

question

In business, forecasts are the basis for:

answer

All of the above

question

Which of the following features would not generally be considered common to all forecasts?

answer

Historical data is available on which to base the forecast.

question

Minimizing the sum of the squared deviations around the line is called:

answer

Least squares

question

The two general approaches to forecasting are:

answer

Qualitative and Quantitative

question

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

answer

Time series analysis

question

Which phrase most closely describes the Delphi technique?

answer

Series of questionnaires

question

One reason for using the Delphi method in forecasting is to:

answer

avoid premature consensus (bandwagon/group think effect)

question

The primary difference between seasonality and cycles is:

answer

the duration of the repeating patterns

question

Using the latest observation in a sequence of data to forecast the next period is:

answer

Native forecast

question

For the data given below, what would the naïve forecast be for the next period (period #5)? Period Demand 1 60 2 58 3 56 4 54

answer

52

question

Moving average forecasting techniques do the following:

answer

Smooth variations in the data

question

In order to increase the responsiveness of a forecast made using the moving average technique, the number of data points in the average should be:

answer

Decreased

question

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

answer

An exponentially smoothed forecast

question

Given an actual demand of 59, a previous forecast of 64, and an alpha of .3, what would the forecast for the next period be using simple exponential smoothing?

answer

62.5

question

A manager uses the following equation to predict monthly receipts: Yt = 40,000 + 150t. What is the forecast for July if t = 0 in April of this year?

answer

40,450

question

In the "additive" model for seasonality, seasonality is expressed as a ______________ adjustment to the average; in the multiplicative model, seasonality is expressed as a __________ adjustment to the average.

answer

Quantity; Percentage

question

Which of the following might be used to indicate the cyclical component of a forecast?

answer

Leading variable

question

The primary method for associative forecasting is:

answer

Regression analysis

question

Which term most closely relates to associative forecasting techniques?

answer

Predictor variables

question

The mean absolute deviation (MAD) is used to:

answer

Measure forecast accuracy

question

Which of the following is used for constructing a control chart?

answer

Mean squared error (MSE)(Sample Variance)

question

Given the following historical data, what is the simple three-period moving average forecast for period 6? Period Demand 1 73 2 68 3 65 4 72 5 67

answer

68

question

Given the following historical data and weights of .5, .3, and .2, what is the three-period weighted moving average forecast for period 5? Period Demand 1 138 2 142 3 148 4 144

answer

144.80

question

Given forecast errors of - 5, - 10, and +15, the MAD is:

answer

10

question

Q26 For the last four periods, the following sales data has been observed: April $2,456 May $4,329 June $2,123 July $3,345 You have been asked to forecast sales for August using the naïve approach. What will you recommend?

answer

Same amount as observed in July

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