OPM CH 3 HW – Flashcards
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Time series forecasting models make predictions about the future based on analysis of past data.
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correct True False
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Experience and trial and error are the simplest ways to choose weights for the weighted moving average forecasting model.
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correct True False Experience and trial and error are the simplest ways to choose weights for the weighted moving average forecasting model.
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MAD statistics can be used to generate tracking signals.
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correct True False In recent years, MAD has made a comeback because of its simplicity and usefulness in obtaining tracking signals.
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Qualitative forecasting techniques generally take advantage of the knowledge of experts and therefore do not require much judgment.
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True correct False Qualitative forecasting techniques generally take advantage of the knowledge of experts and require much judgment.
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Market research is a quantitative method of forecasting.
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True correct False Market research is used mostly for product research in the sense of looking for new product ideas, likes and dislikes about existing products, which competitive products within a particular class are preferred, and so on. Again, the data collection methods are primarily surveys and interviews. It is a discussed under the qualitative techniques in forecasting topic area.
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Decomposition of a time series means identifying and separating the time series data into its components.
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correct True False Decomposition of a time series means identifying and separating the time series data into its components.
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A time series is defined in the text as chronologically ordered data that may contain one or more components of demand variation: trend, seasonal, cyclical, autocorrelation, and random.
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correct True False A time series can be defined as chronologically ordered data that may contain one or more components of demand: trend, seasonal, cyclical, autocorrelation, and random
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We usually associate the word "seasonal" with recurrent periods of repetitive activity that happen on other than an annual cycle.
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True correct False We usually associate seasonal with a period of the year characterized by some particular activity. We use the word cyclical to indicate other than annual recurrent periods of repetitive activity.
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Which of the following is not one of the basic types of forecasting? Time series analysis Qualitative Simulation Force field analysis Causal relationships
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Time series analysis Qualitative Simulation correct Force field analysis Causal relationships Forecasting can be classified into four basic types: qualitative, time series analysis, causal relationships, and simulation.
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Which of the following forecasting methodologies is considered a time series forecasting technique? Simulation Simple moving average Market research Leading indicators Historical analogy
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Simulation correct Simple moving average Market research Leading indicators Historical analogy Simple moving average is the only choice that attempts to predict future values of demand based upon past dat
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In business forecasting, what is usually considered a short-term time period?
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One year Four weeks or less More than three months Six months or more correct Less than three months In business forecasting short term usually refers to under three months.
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In general, which forecasting time frame compensates most effectively for random variation and short term changes? correct
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Short-term forecasts Rapid change forecasts Long range forecasts Medium term forecasts Quick-time forecasts In general, the short-term models compensate for random variation and adjust for short-term changes (such as consumers' responses to a new product).
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A company wants to forecast demand using the simple moving average. If the company uses four prior yearly sales values (i.e., year 2010 = 100, year 2011 = 120, year 2012 = 140, and year 2013 = 210), which of the following is the simple moving average forecast for year 2014?
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140.0 100.5 145.5 correct 142.5 155.0 Forecast for 2014 = (100+120+140+210)/4 = 570/4 = 142.5
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A company wants to forecast demand using the weighted moving average. If the company uses two prior yearly sales values (i.e., year 2012 = 110 and year 2013 = 130), and we want to weight year 2012 at 10% and year 2013 at 90%, which of the following is the weighted moving average forecast for year 2014?
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138 120 142 correct 128 133 Forecast for 2014 = (110x0.1) + (130x0.9) = 11 + 117 = 128
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The exponential smoothing method requires which of the following data to forecast the future? Overall industry demand data The most recent forecast Precise actual demand for the past several years Tracking values The value of the smoothing constant delta
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Overall industry demand data correct The most recent forecast Precise actual demand for the past several years Tracking values The value of the smoothing constant delta In the exponential smoothing method, only three pieces of data are needed to forecast the future: the most recent forecast, the actual demand that occurred for that forecast period, and a smoothing constant alpha.
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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? The more rapid the growth, the lower the percentage 50 % or more A very low percentage, less than 10% The more rapid the growth, the higher the percentage Close to zero
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The more rapid the growth, the lower the percentage 50 % or more A very low percentage, less than 10% correct The more rapid the growth, the higher the percentage Close to zero If a firm were experiencing growth, it would be desirable to have a higher reaction rate, perhaps 15 to 30 percentage points, to give greater importance to recent growth experience. The more rapid the growth, the higher the reaction rate should be.
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As a consultant you have been asked to generate a unit demand forecast for a product for year 2014 using exponential smoothing. The actual demand in year 2013 was 750. The forecast demand in year 2013 was 960. Using this data and a smoothing constant alpha of 0.3, which of the following is the resulting year 2014 forecast value? 813 1,120 897 766 1,023
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813 1,120 correct 897 766 1,023 Forecast = 960 + 0.3 x (960-750) = 897
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Heavy sales of umbrellas during a rain storm is an example of which of the following? A causal relationship A statistical correlation A coincidence A trend A fad
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correct A causal relationship A statistical correlation A coincidence A trend A fad We can expect that an extended period of rain will increase sales of umbrellas and raincoats. The rain causes the sale of rain gear. This is a causal relationship, where one occurrence causes another.
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Statistical information is very important in building the forecasts. Qualitative input is secondary in importance.
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True correct False Market knowledge and business savvy are critically important in understanding future business leve
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Marketing and Sales both have specific and different inputs into the Demand Plan.
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correct True False Marketing is focused on changing customer behavior. Sales focuses on closing orders.
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Statistical inputs are important and represent the most significant forecast input affecting trends and accuracy, easily more important than qualitative inputs.
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True correct False While statistical data are important, it is market and customer knowledge that defines improved accuracy.
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The Demand Plan has several inputs. These include (choose best answer): Business Plan inputs and Marketing inputs None of the above. Production inputs Direct-feed customer input to the final demand plan without modification.
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correct Business Plan inputs and Marketing inputs None of the above. Production inputs Direct-feed customer input to the final demand plan without modification. There are several inputs that go into the Demand Plan. Not all of the listed ones were on the instructor slide showing inputs. Some were.
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The operations manager or VP off Operations needs to be the process owner for the Demand Plan.
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True correct False
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Pyramid forecasting techniques are rare but offer some advantages in accuracy over exponential smoothing when data are difficult to find.
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True correct False
