Question 1

When error values fall outside the limits of a control chart,this signals a need for corrective action

Accepted Answer

A) True 
 B)False

Question 2

Forecasts can help a manager to do all of the following EXCEPT:

Accepted Answer

A)  reduce uncertainty in planning.
B)  design the system.
C)  plan the medium-term use of the system.
D)  schedule the short-term use of the system.
E)  predict the future precisely.F) A) and B)
G) C) and E)

Question 3

Which of the following are most likely to be used for forecasting demand for the longer term?

Accepted Answer

A)  Regression trend models
B)  Judgmental methods
C)  Delphi method
D)  Simple exponential smoothing
E)  Naïve methodF) A) and E)
G) A) and D)

Question 4

Use linear regression to develop a predictive model for demand for ironing board covers based on sales of irons.
  (i)Develop the equation.
(ii)What is the coefficient of correlation for this data?
 11eab92b_c4ad_d4b0_99e6_0f93361a9e44

Accepted Answer

(i)Y_C = -1.28571 + 0.714285x (ii)r = +.714

Question 5

Moving average forecasting techniques:

Accepted Answer

A)  immediately reflect changing patterns in the time series.
B)  lead changes in the time series.
C)  smooth variations in the time series.
D)  exhibit more variability than the original data.
E)  are best used when demand shows a steady increase.F) A) and D)
G) B) and C)

Question 6

Exponential smoothing is a form of weighted averaging.

Accepted Answer

A) True 
 B)False  True

Question 7

Sales for a product have been fairly consistent over several years,although showing a steady upward trend.The company wants to understand what drives sales.The best forecasting technique would be:

Accepted Answer

A)  trend models.
B)  judgmental methods.
C)  moving averages.
D)  regression models.
E)  exponential smoothing techniques.F) A) and B)
G) D) and E)

Question 8

Which of the following corresponds to the predictor variable in simple linear regression?

Accepted Answer

A)  Regression coefficient
B)  Dependent variable
C)  Independent variable
D)  Predicted variable
E)  DemandF) D) and E)
G) B) and D)

Question 9

Increasing the number of data points included in a moving average will result in a forecast that is smoother but less responsive to changes.

Accepted Answer

A) True 
 B)False

Question 10

The owner of Leisure Boutique in a local mall is forecasting this month's (October's) demand for one of her best-selling products based on the following historical data:  What is this month's forecast using a four-month weighted moving average with weights of .4,.3,.2,and .1?

Accepted Answer

A)  120
B)  129
C)  141
D)  135
E)  140F) C) and D)
G) A) and E)

Question 11

The dean of a school of business is forecasting total student enrolment for this year's summer session classes based on the following historical data:  What is this year's forecast using the least squares trend line for these data?

Accepted Answer

A)  3,600
B)  3,500
C)  3,400
D)  3,300
E)  3,200F) C) and E)
G) A) and C)

Question 12

The mean absolute deviation (MAD) is used to:

Accepted Answer

A)  estimate the trend line.
B)  eliminate forecast errors.
C)  measure forecast accuracy.
D)  seasonally adjust the forecast.
E)  measure average data.F) All of the above
G) A) and B)

Question 13

Which technique is useful in computing seasonal relatives?

Accepted Answer

A)  Double smoothing
B)  Delphi technique
C)  MSE
D)  Centred moving average
E)  Exponential smoothingF) B) and E)
G) A) and E)

Question 14

In order to compute seasonal relatives,the trend of past data must be computed or known.

Accepted Answer

A) True 
 B)False

Question 15

One reason for using the Delphi method in forecasting is:

Accepted Answer

A)  responses are anonymous.
B)  to achieve a high degree of accuracy.
C)  to maintain accountability and responsibility.
D)  to be able to replicate results.
E)  the ability to directly meet with customersF) All of the above
G) A) and E)

Question 16

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

Accepted Answer

A)  a naive forecast.
B)  a simple moving average forecast.
C)  a centred moving average forecast.
D)  an exponentially smoothed forecast.
E)  an associative forecast.F) B) and C)
G) A) and B)

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

An operation analyst is forecasting this year's demand for one of his company's products based on the following historical data:  What is this year's forecast using the naive approach?

Accepted Answer

A)  22,000
B)  20,000
C)  18,000
D)  15,000
E)  12,000 The series displays trend.F) C) and D)
G) A) and E)

Question 19

A manager wants to choose one of two forecasting alternatives.Each alternative was tested using historical data.The resulting forecast errors for the two are shown in the table.Analyze the data and recommend a course of action to the manager.
 11eab92b_c4ae_22d7_99e6_a3b9e96a07cf

Accepted Answer

MSE #1 = 3.444 MSE #2 = 4.222 Although A...

Question 20

Forecasts for groups of items tend to be less accurate than forecasts for individual items because forecasts for individual items are not subject to as many influencing factors.

Accepted Answer

A) True 
 B)False  False

Exam 3: Demand Forecasting

When error values fall outside the limits of a control chart,this signals a need for corrective action

Correct AnswerverifiedShow Answer

Forecasts can help a manager to do all of the following EXCEPT:

Correct AnswerverifiedShow Answer

Which of the following are most likely to be used for forecasting demand for the longer term?

Correct AnswerverifiedShow Answer

Use linear regression to develop a predictive model for demand for ironing board covers based on sales of irons. (i)Develop the equation. (ii)What is the coefficient of correlation for this data? 11eab92b_c4ad_d4b0_99e6_0f93361a9e44

Correct Answerverified(i)YC = -1.28571 + 0.714285x (ii)r = +.714

Moving average forecasting techniques:

Correct AnswerverifiedShow Answer

Exponential smoothing is a form of weighted averaging.

Correct AnswerverifiedTrue

Sales for a product have been fairly consistent over several years,although showing a steady upward trend.The company wants to understand what drives sales.The best forecasting technique would be:

Correct AnswerverifiedShow Answer

Which of the following corresponds to the predictor variable in simple linear regression?

Correct AnswerverifiedShow Answer

Increasing the number of data points included in a moving average will result in a forecast that is smoother but less responsive to changes.

Correct AnswerverifiedShow Answer

The owner of Leisure Boutique in a local mall is forecasting this month's (October's) demand for one of her best-selling products based on the following historical data: What is this month's forecast using a four-month weighted moving average with weights of .4,.3,.2,and .1?

Correct AnswerverifiedShow Answer

The dean of a school of business is forecasting total student enrolment for this year's summer session classes based on the following historical data: What is this year's forecast using the least squares trend line for these data?

Correct AnswerverifiedShow Answer

The mean absolute deviation (MAD) is used to:

Correct AnswerverifiedShow Answer

Which technique is useful in computing seasonal relatives?

Correct AnswerverifiedShow Answer

In order to compute seasonal relatives,the trend of past data must be computed or known.

Correct AnswerverifiedShow Answer

One reason for using the Delphi method in forecasting is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An operation analyst is forecasting this year's demand for one of his company's products based on the following historical data: What is this year's forecast using the naive approach?

Correct AnswerverifiedShow Answer

A manager wants to choose one of two forecasting alternatives.Each alternative was tested using historical data.The resulting forecast errors for the two are shown in the table.Analyze the data and recommend a course of action to the manager. 11eab92b_c4ae_22d7_99e6_a3b9e96a07cf

Correct AnswerverifiedMSE #1 = 3.444 MSE #2 = 4.222 Although A...View AnswerShow Answer

Forecasts for groups of items tend to be less accurate than forecasts for individual items because forecasts for individual items are not subject to as many influencing factors.

Correct AnswerverifiedFalse

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(i)Y_C = -1.28571 + 0.714285x (ii)r = +.714

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True

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MSE #1 = 3.444 MSE #2 = 4.222 Although A...
View Answer

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False