ISDS 3115 – Flashcard
Unlock all answers in this set
Unlock answersquestion
A naive forecast for September sales of a product would be equal to the forecast for August.
answer
FALSE
question
The forecasting time horizon and the forecasting techniques used to vary over the life cycle of a product.
answer
TRUE
question
Demand (sales) forecasts serve as inputs to financial, marketing, and personnel planning.
answer
TRUE
question
Forecasts of individual products tend to be more accurate than forecasts of product families.
answer
FALSE
question
Most forecasting techniques assume that there is some underlying stability in the system.
answer
TRUE
question
The sales force composite forecasting method relies on salespersons' estimates of expected sales.
answer
TRUE
question
A time-series model uses a series of past data points to make the forecast
answer
TRUE
question
The quarterly "make meeting" of Lexus dealers is an example of a sales force composite forecast.
answer
TRUE
question
Cycles and random variation are both components of time series.
answer
TRUE
question
A naive forecast for September sales of a product would be equal to the sales in August.
answer
TRUE
question
One advantage of exponential smoothing is the limited amount of record keeping involved.
answer
TRUE
question
The larger the number of periods in the simple moving average forecasting method, the greater the method's responsiveness to changes in demand.
answer
FALSE
question
Forecast including trend is an exponential smoothing technique that utilizes two smoothing constants: one for the average level of the forecast and one for its trend.
answer
TRUE
question
Mean squared error and Coefficient of Correlation are two measures of the overall error of a forecasting model.
answer
FALSE
question
In trend projection, the trend component is the slope of the regression equation.
answer
TRUE
question
In trend projection, a negative regression slope is mathematically impossible.
answer
FALSE
question
Seasonal indexes adjust raw data for patterns that repeat at regular time intervals.
answer
TRUE
question
If a quarterly seasonal index has been calculated at 1.55 for the October-December quarter, then raw data for that quarter must be multiplied by 1.55 so that the quarter can be fairly compare to other quarters.
answer
FALSE
question
The best way to forecast a business cycle is by finding a leading variable.
answer
TRUE
question
Linear regression analysis is a straight-line mathematical model to describe the functional relationships between independent and dependent variables.
answer
TRUE
question
The larger the standard error of the estimate, the more accurate the forecasting model.
answer
FALSE
question
A trend projection equation with a slope of 0.78 means that there is a 0.78 unit rise in Y for every unit of time that passes.
answer
TRUE
question
In a regression equation where Y is demand and X is advertising, a coefficient of determination (r squared) of .70 means that 70% of the variance in advertising is explained by demand.
answer
FALSE
question
Demand cycles for individual products can be driven by product life cycles.
answer
TRUE
question
If a forecast is consistently greater than (or less than) actual values, the forecast is said to be biased.
answer
TRUE
question
Focus forecasting tries a variety of computer models and selects the best one for a particular application.
answer
TRUE
question
Many service firms use point-of-sale computers to collect detailed records needed for accurate short-term forecasts.
answer
TRUE
question
What two numbers are contained in the daily report to the CEO of Walt Disney Parks & Resorts regarding the six Orlando parks?
answer
yesterday's forecasted attendance and yesterday's actual attendance
question
Using an exponential smoothing modeal with smoothing constant alpha= .20, how much weight would be assigned to the 2nd most recent period?
answer
.16
question
Forecasts:
answer
are rarely perfect
question
One use of short-range forecasts is to determine
answer
job assignments
question
Forecasts are usually classified by time horizon into three categories:
answer
short-range, medium-range, and long-range
question
A forecast with a time horizon of about 3 months to 3 years is typically called a
answer
medium-range forecast
question
Forecasts used for new product planning, capital expenditures, facility location or expansion, and R&D typically utilize a...
answer
long-range time horizon
question
The three major types of forecasts used by business organizations are:
answer
economic, technological, and demand
question
Which of the following is not a step in the forecasting process?
answer
eliminate any assumptions
question
The two general approaches to forecasting are:
answer
qualitative and quantitative
question
Which of the following uses three types of participants: decision makers, staff personnel, and respondents?
answer
the delphi method
question
The forecasting model that pools the opinions of a group of experts or managers is known as the:
answer
jury of executive opinion modeal
question
Which of the following is NOT a type of qualitative forecasting?
answer
moving average
question
Which of the following techniques uses variables such as price and promotional expenditures, which are related to product demand, to predict demand?
answer
Associative models
question
Which of the following statements about time series forecasting is true?
answer
The analysis of past demand helps predict future demand.
question
Time series data may exhibit which of the following behaviors?
answer
They may exhibit all of the above.
question
Gradual, long-term movement in time series data is called
answer
trends
question
Which of the following is not present in a time series?
answer
operational variations
question
The fundamental difference between cycles and seasonality is the:
answer
duration of the repeating patterns
question
In time series, which of the following cannot be predicted?
answer
random fluctuation
question
What is the approximate forecast for May using a four-month moving average? Nov=39, Dec=36, Jan=40, Feb=42, Mar=48, April=46?
answer
44
question
What time series model below assumes that demand in the next period will be equal to the most recent period's demand?
answer
naive approach
question
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 to 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?
answer
2511
question
A six-month moving average forecast is better than a three-month moving average forecast if demand:
answer
is rather stable
question
Increasing the number of periods in a moving average will accomplish greater smoothing, but at the expense of:
answer
responsiveness to changes
question
Which of the following statements comparing the weighted moving average technique and exponential smoothing is true:
answer
Exponential smoothing typically requires less record keeping of past data.
question
Which time series model uses past forecasts and past demand data to generate a new forecast?
answer
exponential smoothing
question
Which is NOT a characteristic of exponential smoothing?
answer
weights each historical value equally
question
Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast?
answer
1.0
question
Given an actual demand of 103, a previous forecast value of 99, and an alpha of 0.4, the exponential smoothing forecast for the next period would be:
answer
100.6
question
A forecast based on the previous forecast plus a percentage of the forecast error is an:
answer
exponentially smoothed forecast
question
Given an actual demand of 61, a previous forecast of an alpha=0.3, what would the forecast for the next period be using simple exponential smoothing?
answer
58.9
question
Which of the following values of alpha would cause exponential smoothing to respond the most slowly to forecast errors?
answer
0.10 (the lowest number)
question
The primary purpose of the mean absolute deviation (MAD) in forecasting is to:
answer
measure forecast accuracy
question
Given forecast errors of -1, 4, 8, and -3, what is the mean absolute deviation?
answer
4
question
The last four months of sales were 8, 10, 15, and 9 units. The last four forecast 5, 6, 11, and 12 units. The Mean Absolute Deviation (MAD) is:
answer
3.5
question
A time series trend equation is 25.3 + 2.1 X. what is your forecast for period 7?
answer
40.0
question
For a given product demand, the time series trend equation is 53 - 4X. The negative sign on the slope of the equation:
answer
is an indication that product demand is declining
question
Yamaha manufacturers which set of products with complementary demands to address seasonal fluctuations:
answer
jet skis and snowmobiles
question
Which of the following is TRUE regarding two smoothing constants of the Forecast Including Trend (FIT) model?
answer
Their values are determined independently
question
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 is 1.25. What is the seasonally-adjusted sales forecast for January?
answer
1000 units
question
A seasonal index for a monthly series is about to be calculated on the basis of three years' accumulation of data. The three previous July values were 110, 150, and 130. The average over all months is 190. The approximate seasonal index for July is:
answer
0.684
question
A fundamental distinction between trend projection and linear regression is that :
answer
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.
question
The percent of variation in the dependent variable that is explained by the regression equation is measured by the:
answer
coefficient of determination
question
The degree or strength of a linear relationship is shown by the
answer
correlation coefficient
question
If two variables were perfectly correlated, the correlation coefficient r would equal:
answer
b or c (-1 and 1)
question
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:
answer
bias
question
The tracking signal is the
answer
ratio RSFE/MAD
question
Computer monitoring of tracking signals and self-adjustment is a signal passes a preset limit is characteristic of:
answer
adaptive smoothing
question
Many services maintain records of sales noting:
answer
all of the above (the day of week, unusual events, weather, holidays)
question
Taco Bell's unique employee scheduling parties are partly the result of using
answer
a and c (point-of-sale computers to track food sales in 15 minute intervals AND a six-week moving average forecasting technique)
