Chapter 3 PDF

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Student: ___________________________________________________________________________
1.Forecasting techniques generally assume an existing causal system that will continue to exist in the
future.
TrueFalse
2.For new products in a strong growth mode, a low alpha will minimize forecast errors when using
exponential smoothing techniques.
TrueFalse
3.Once accepted by managers, forecasts should be held firm regardless of new input since many plans have
been made using the original forecast.
TrueFalse
4.Forecasts for groups of items tend to be less accurate than forecasts for individual items because forecasts
for individual items don't include as many influencing factors.
TrueFalse
5.Forecasts help managers plan both the system itself and provide valuable information for using the
system.
TrueFalse
6.Organizations that are capable of responding quickly to changing requirements can use a shorter forecast
horizon and therefore benefit from more accurate forecasts.
TrueFalse
7.When new products or services are introduced, focus forecasting models are an attractive option.
TrueFalse
8.The purpose of the forecast should be established first so that the level of detail, amount of resources, and
accuracy level can be understood.
TrueFalse
9.Forecasts based on time series (historical) data are referred to as associative forecasts.
TrueFalse
10.Time series techniques involve identification of explanatory variables that can be used to predict future
demand.
TrueFalse
11.A consumer survey is an easy and sure way to obtain accurate input from future customers since most
people enjoy participating in surveys.
TrueFalse
12.The Delphi approach involves the use of a series of questionnaires to achieve a consensus forecast.
TrueFalse
13.Exponential smoothing adds a percentage (called alpha) of last period's forecast to estimate next period's
demand.
TrueFalse
14.The shorter the forecast period, the more accurately the forecasts tend to track what actually happens.
TrueFalse
15.Forecasting techniques that are based on time series data assume that future values of the series will
duplicate past values.
TrueFalse
16.Trend adjusted exponential smoothing uses double smoothing to add twice the forecast error to last
period's actual demand.
TrueFalse
17.Forecasts based on an average tend to exhibit less variability than the original data.
TrueFalse
18.The naive approach to forecasting requires a linear trend line.

TrueFalse
19.The naive forecast is limited in its application to series that reflect no trend or seasonality.
TrueFalse
20.The naive forecast can serve as a quick and easy standard of comparison against which to judge the cost
and accuracy of other techniques.
TrueFalse
21.A moving average forecast tends to be more responsive to changes in the data series when more data
points are included in the average.
TrueFalse
22.In order to update a moving average forecast, the values of each data point in the average must be
known.
TrueFalse
23.Forecasts of future demand are used by operations people to plan capacity.

TrueFalse
24.An advantage of a weighted moving average is that recent actual results can be given more importance
than what occurred a while ago.
TrueFalse
25.Exponential smoothing is a form of weighted averaging.

TrueFalse
26.A smoothing constant of .1 will cause an exponential smoothing forecast to react more quickly to a
sudden change than a smoothing constant value of .3.
TrueFalse
27.The T in the model TAF = S+T represents the time dimension (which is usually expressed in weeks or
months).
TrueFalse
28.Trend adjusted exponential smoothing requires selection of two smoothing constants.

TrueFalse
29.An advantage of "trend adjusted exponential smoothing" over the "linear trend equation" is its ability to
adjust over time to changes in the trend.
TrueFalse
30.A seasonal relative (or seasonal indexes) is expressed as a percentage of average or trend.
TrueFalse
31.In order to compute seasonal relatives, the trend of past data must be computed or known which means
that for brand new products this approach can't be used.
TrueFalse
32.Removing the seasonal component from a data series (de-seasonalizing) can be accomplished by
dividing each data point by its appropriate seasonal relative.
TrueFalse
33.If a pattern appears when a dependent variable is plotted against time, one should use time series
analysis instead of regression analysis.
TrueFalse
34.Curvilinear and multiple regression procedures permit us to extend associative models to relationships
that are non-linear or involve more than one predictor variable.
TrueFalse
35.The sample standard deviation of forecast error is equal to the square root of MSE.
TrueFalse
36.Correlation measures the strength and direction of a relationship between variables.

TrueFalse
37.MAD is equal to the square root of MSE which is why we calculate the easier MSE and then calculate
the more difficult MAD.
TrueFalse
38.In exponential smoothing, an alpha of 1.0 will generate the same forecast that a nave forecast would
yield.
TrueFalse
39.A forecast method is generally deemed to perform adequately when the errors exhibit an identifiable
pattern.
TrueFalse
40.A control chart involves setting action limits for cumulative forecast error.
TrueFalse
41.A tracking signal focuses on the ratio of cumulative forecast error to the corresponding value of MAD.
TrueFalse
42.The use of a control chart assumes that errors are normally distributed about a mean of zero.
TrueFalse
43.Bias exists when forecasts tend to be greater or less than the actual values of time series.
TrueFalse
44.Bias is measured by the cumulative sum of forecast errors.

TrueFalse
45.Seasonal relatives can be used to de-seasonalize data or incorporate seasonality in a forecast.

TrueFalse
46.The best forecast is not necessarily the most accurate.

TrueFalse
47.A proactive approach to forecasting views forecasts as probable descriptions of future demand, and
requires action to be taken to meet that demand.
TrueFalse
48.Simple linear regression applies to linear relationships with no more than three independent variables.
TrueFalse
49.An important goal of forecasting is to minimize the average forecast error.

TrueFalse
50.Forecasting techniques such as moving averages, exponential smoothing, and the naive approach all
represent smoothed (averaged) values of time series data.
TrueFalse
51.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.
TrueFalse
52.Forecasts based on judgment and opinion don't include

A.executive opinion
B.salesperson opinion
C.second opinions
D.customer surveys
E.Delphi methods
53.In business, forecasts are the basis for:

A.capacity planning
B.budgeting
C.sales planning
D.production planning
E.all of the above
54.Which of the following features would not generally be considered common to all forecasts?
A.Assumption of a stable underlying causal system.
B.Actual results will differ somewhat from predicted values.
C.Historical data is available on which to base the forecast.
D.Forecasts for groups of items tend to be more accurate than forecasts for individual items.
E.Accuracy decreases as the time horizon increases.
55.Which of the following is not a step in the forecasting process?

A.determine the purpose and level of detail required
B.eliminate all assumptions
C.establish a time horizon
D.select a forecasting model
E.monitor the forecast
56.Minimizing the sum of the squared deviations around the line is called:
A.mean squared error technique

B.mean absolute deviation
C.double smoothing
D.least squares estimation
E.predictor regression
57.The two general approaches to forecasting are:

A.mathematical and statistical
B.qualitative and quantitative
C.judgmental and qualitative
D.historical and associative
E.precise and approximation
58.Which of the following is not a type of judgmental forecasting?

A.executive opinions
B.sales force opinions
C.consumer surveys
D.the Delphi method
E.time series analysis
59.Accuracy in forecasting can be measured by:

A.MSE
B.MRP
C.MAPE
D.MTM
E.A & C
60.Which of the following would be an advantage of using a sales force composite to develop a demand
forecast?
A.The sales staff is least affected by changing customer needs.
B.The sales force can easily distinguish between customer desires and probable actions.
C.The sales staff is often aware of customers' future plans.
D.Salespeople are least likely to be influenced by recent events.
E.Salespeople are least likely to be biased by sales quotas.
61.Which phrase most closely describes the Delphi technique?

A.associative forecast
B.consumer survey
C.series of questionnaires
D.developed in India
E.historical data
62.The forecasting method which uses anonymous questionnaires to achieve a consensus forecast is:
A.sales force opinions

B.consumer surveys
C.the Delphi method
D.time series analysis
E.executive opinions
63.One reason for using the Delphi method in forecasting is to:

A.avoid premature consensus (bandwagon effect)
B.achieve a high degree of accuracy
C.maintain accountability and responsibility
D.be able to replicate results
E.prevent hurt feelings
64.Detecting non-randomness in errors can be done using:

A.MSEs
B.MAPs
C.Control Charts
D.Correlation Coefficients
E.Strategies
65.Gradual, long-term movement in time series data is called:

A.seasonal variation
B.cycles
C.irregular variation
D.trend
E.random variation
66.The primary difference between seasonality and cycles is:

A.the duration of the repeating patterns
B.the magnitude of the variation
C.the ability to attribute the pattern to a cause
D.the direction of the movement
E.there are only 4 seasons but 30 cycles
67.Averaging techniques are useful for:

A.distinguishing between random and non-random variations
B.smoothing out fluctuations in time series
C.eliminating historical data
D.providing accuracy in forecasts
E.average people
68.Putting forecast errors into perspective is best done using

A.Exponential smoothing
B.MAPE
C.Linear decision rules
D.MAD
E.Hindsight
69.Using the latest observation in a sequence of data to forecast the next period is:
A.a moving average forecast
B.a naive forecast
C.an exponentially smoothed forecast
D.an associative forecast
E.regression analysis
70.For the data given below, what would the naive forecast be for the next period (period #5)?
A.58
B.62
C.59.5
D.61
E.cannot tell from the data given
71.Moving average forecasting techniques do the following:

A.immediately reflect changing patterns in the data
B.lead changes in the data
C.smooth variations in the data
D.operate independently of recent data
E.assist when organizations are relocating
72.Which is not a characteristic of simple moving averages applied to time series data?
A.smoothes random variations in the data
B.weights each historical value equally
C.lags changes in the data
D.requires only last period's forecast and actual data
E.smoothes real variations in the data
73.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:
A.decreased
B.increased
C.multiplied by a larger alpha
D.multiplied by a smaller alpha
E.eliminated if the MAD is greater than the MSE
74.A forecast based on the previous forecast plus a percentage of the forecast error is:
A.a naive forecast

B.a simple moving average forecast
C.a centered moving average forecast
D.an exponentially smoothed forecast
E.an associative forecast
75.Which is not a characteristic of exponential smoothing?

C.has an easily altered weighting scheme
D.has minimal data storage requirements
76.Which of the following smoothing constants would make an exponential smoothing forecast equivalent
to a naive forecast?
A.0
B..01
C..1
D..5
E.1.0
77.Simple exponential smoothing is being used to forecast demand. The previous forecast of 66 turned out
to be four units less than actual demand. The next forecast is 66.6, implying a smoothing constant, alpha,
equal to:
A..01
B..10
C..15
D..20
E..60
78.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?
A.36.9
B.57.5
C.60.5
D.62.5
E.65.5
79.Given an actual demand of 105, a forecasted value of 97, and an alpha of .4, the simple exponential
smoothing forecast for the next period would be:
A.80.8
B.93.8
C.100.2
D.101.8
E.108.2
80.Which of the following possible values of alpha would cause exponential smoothing to respond the most
quickly to forecast errors?
A.0
B..01
C..05
D..10
E..15
81.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?
A.40,450
B.40,600
C.42,100
D.42,250
E.42,400
82.In trend-adjusted exponential smoothing, the trend adjusted forecast (TAF) consists of:
A.an exponentially smoothed forecast and a smoothed trend factor
B.an exponentially smoothed forecast and an estimated trend value
C.the old forecast adjusted by a trend factor
D.the old forecast and a smoothed trend factor
E.a moving average and a trend factor
83.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.
A.quantity, percentage
B.percentage, quantity
C.quantity, quantity
D.percentage, percentage
E.qualitative, quantitative
84.Which technique is used in computing seasonal relatives?

A.double smoothing
B.Delphi
C.Mean Squared Error (MSE)
D.centered moving average
E.exponential smoothing
85.A persistent tendency for forecasts to be greater than or less than the actual values is called:
A.bias
B.tracking
C.control charting
D.positive correlation
E.linear regression
86.Which of the following might be used to indicate the cyclical component of a forecast?
A.leading variable
B.Mean Squared Error (MSE)
C.Delphi technique
D.exponential smoothing
E.Mean Absolute Deviation (MAD)
87.The primary method for associative forecasting is:

A.sensitivity analysis
B.regression analysis
C.simple moving averages
D.centered moving averages
88.Which term most closely relates to associative forecasting techniques?

A.time series data
B.expert opinions
C.Delphi technique
D.consumer survey
E.predictor variables
89.Which of the following corresponds to the predictor variable in simple linear regression?
A.regression coefficient
B.dependent variable
C.independent variable
D.predicted variable
E.demand coefficient
90.The mean absolute deviation (MAD) is used to:

A.estimate the trend line
B.eliminate forecast errors
C.measure forecast accuracy
D.seasonally adjust the forecast
E.all of the above
91.Given forecast errors of 4, 8, and - 3, what is the mean absolute deviation?

A.4
B.3
C.5
D.6
E.12
92.Given forecast errors of 5, 0, - 4, and 3, what is the mean absolute deviation?

A.4
B.3
C.2.5
D.2
E.1
93.Given forecast errors of 5, 0, - 4, and 3, what is the bias?

A.- 4
B.4
C.5
D.12
E.6
94.Which of the following is used for constructing a control chart?

A.mean absolute deviation (MAD)
B.mean squared error (MSE)
C.tracking signal (TS)
D.bias
E.none of the above
95.The two most important factors in choosing a forecasting technique are:

A.cost and time horizon
B.accuracy and time horizon
C.cost and accuracy
D.quantity and quality
E.objective and subjective components
96.The degree of management involvement in short range forecasts is:

A.none
B.low
C.moderate
D.high
E.total
97.Which of the following is not necessarily an element of a good forecast?

A.estimate of accuracy
B.timeliness
C.meaningful units
D.low cost
E.written
98.Current information on _________ can have a significant impact on forecast accuracy:

A.prices
B.promotion
C.inventory
D.competition
E.all of the above
99.A managerial approach toward forecasting which seeks to actively influence demand is:
A.reactive
B.proactive
C.influential
D.protracted
E.retroactive
100.Customer service levels can be improved by better:

A.mission statements
B.control charting
C.short term forecast accuracy
E.customer selection
101.Given the following historical data, what is the simple three-period moving average forecast for period
6?
A.67
B.115
C.69
D.68
E.68.67
102.Given the following historical data and weights of .5, .3, and .2, what is the three-period moving
average forecast for period 5?
A.144.20
B.144.80
C.144.67
D.143.00
E.144.00
103.Use of simple linear regression analysis assumes that:

A.Variations around the line are random.
B.Deviations around the line are normally distributed.

C.Predictions are to be made only within the range of observed values of the predictor variable.
D.all of the above
E.none of the above
104.Given forecast errors of - 5, - 10, and +15, the MAD is:

A.0
B.10
C.30
D.175
E.none of these
105.Develop a forecast for the next period, given the data below, using a 3-period moving average.
106.Consider the data below:
Using exponential smoothing with alpha = .2, and assuming the forecast for period 11 was 80, what would
the forecast for period 14 be?
107.A manager is using exponential smoothing to predict merchandise returns at a suburban branch of a
department store chain. Given a previous forecast of 140 items, an actual number of returns of 148 items,
and a smoothing constant equal to .15, what is the forecast for the next period?
108.A manager is using the equation below to forecast quarterly demand for a product:
Yt = 6,000 + 80t where t = 0 at Q2 of last year
Quarter relatives are Q1 = .6, Q2 = .9, Q3 = 1.3, and Q4 = 1.2.
What forecasts are appropriate for the last quarter of this year and the first quarter of next year?
109.Over the past five years, a firm's sales have averaged 250 units in the first quarter of each year, 100
units in the second quarter, 150 units in the third quarter, and 300 units in the fourth quarter. What are
appropriate quarter relatives for this firm's sales? Hint: Only minimal computations are necessary.
110.A manager has been using a certain technique to forecast demand for gallons of ice cream for the past
six periods. Actual and predicted amounts are shown below. Would a naive forecast have produced better
results?
111.A new car dealer has been using exponential smoothing with an alpha of .2 to forecast weekly new car
sales. Given the data below, would a naive forecast have provided greater accuracy? Explain. Assume an
initial exponential forecast of 60 units in period 2 (i.e., no forecast for period 1).
112.A CPA firm has been using the following equation to predict annual demand for tax audits: Yt = 55 + 4t
Demand for the past few years is shown below. Is the forecast performing as well as it might? Explain.
113.Given the data below, develop a forecast for period 6 using a four-period weighted moving average and
weights of .4, .3, .2 and .1
114.Use linear regression to develop a predictive model for demand for burial vaults based on sales of
caskets.
A) Develop the regression equation.
115.Given the following data, develop a linear regression model for y as a function of x.
117.Develop a linear trend equation for the data on bread deliveries shown below. Forecast deliveries for
period 11 through 14.
118.The president of State University wants to forecast student enrollments for this academic year based on
the following historical data:
What is the forecast for this year using the naive approach?
A.18,750
B.19,500
C.21,000
D.22,000
E.22,800
119.Demand for the last four months was:
A) Predict demand for July using each of these methods:

1) a 3-period moving average
2) exponential smoothing with alpha equal to .20 (use a nave forecast for April for your first forecast)
B) If the naive approach had been used to predict demand for April through June, what would MAD have
been for those months?
120.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.
121.A manager uses this equation to predict demand: Yt = 20 + 4t. Over the past 8 periods, demand has
been as follows. Are the results acceptable? Explain.
The president of State University wants to forecast student enrollments for this academic year based on the
following historical data:
122.What is the forecast for this year using a four-year simple moving average?
A.18,750
B.19,500
C.21,000
D.22,650
E.22,800
123.What is the forecast for this year using exponential smoothing with alpha = 0.5, if the forecast for two
years ago was 16,000?
A.18,750
B.19,500
C.21,000
D.22,650
E.22,800
124.What is the forecast for this year using the least squares trend line for these data?
A.18,750
B.19,500
C.21,000
D.22,650
E.22,800
125.What is the forecast for this year using trend adjusted (double) smoothing with alpha = .05 and beta =
0.3, if the forecast for last year was 21,000, the forecast for two years ago was 19,000, and the trend estimate
for last year's forecast was 1,500?
A.18,750
B.19,500
C.21,000
D.22,650
E.22,800
The business analyst for Video Sales, Inc. wants to forecast this year's demand for DVD decoders based on
126.What is the forecast for this year using the naive approach?
A.163
B.180
C.300
D.420
E.510
127.What is the forecast for this year using a three-year weighted moving average with weights of .5, .3,
and .2?
A.163
B.180
C.300
D.420
E.510
128.What is the forecast for this year using exponential smoothing with alpha = .4, if the forecast for two
years ago was 750?
A.163
B.180
C.300
D.420
E.510
A.163
B.180
C.300
D.420
E.510
130.What is the forecast for this year using trend adjusted (double) smoothing with alpha = 0.3 and beta =
0.2, if the forecast for last year was 310, the forecast for two years ago was 430, and the trend estimate for
last year's forecast was -150?
A.162.4
B.180.3
C.301.4
D.403.2
E.510.0
Professor Very Busy needs to allocate time next week to include time for office hours. He needs to forecast
the number of students who will seek appointments. He has gathered the following data:
131.What is this week's forecast using the naive approach?

A.45
B.50
C.52
D.65
E.78
132.What is this week's forecast using a three-week simple moving average?

A.49
B.50
C.52
D.65
E.78
133.What is this week's forecast using exponential smoothing with alpha = .2, if the forecast for two weeks
ago was 90?
A.49
B.50
C.52
D.65
E.77
134.What is this week's forecast using the least squares trend line for these data?
A.49
B.50
C.52
D.65
E.78
135.What is this week's forecast using trend adjusted (double) smoothing with alpha = 0.5 and beta = 0.1, if
the forecast for last week was 65, the forecast for two weeks ago was 75, and the trend estimate for last
week's forecast was -5?
A.49.3
B.50.6
C.51.3
D.65.4
E.78.7
A concert promoter is forecasting this year's attendance for one of his concerts based on the following
historical data:
136.What is this year's forecast using the naive approach?

A.22,000
B.20,000
C.18,000
D.15,000
E.12,000
137.What is this year's forecast using a two-year weighted moving average with weights of .7 and .3?
A.19,400
B.18,600
C.19,000
D.11,400
E.10,600
138.What is this year's forecast using exponential smoothing with alpha = .2, if last year's smoothed
forecast was 15,000?
A.20,000
B.19,000
C.17,500
D.16,000
E.15,000
139.What is this year's forecast using the least squares trend line for these data?
A.20,000
B.21,000
C.22,000
D.23,000
E.24,000
140.The previous trend line had predicted 18,500 for two years ago, and 19,700 for last year. What was the
mean absolute deviation (MAD) for these forecasts?
A.100
B.200
C.400
D.500
E.800
The dean of a school of business is forecasting total student enrollment for this year's summer session
classes based on the following historical data:

A.2,000
B.2,200
C.2,800
D.3,000
E.none of the above
142.What is this year's forecast using a three-year simple moving average?

A.2,667
B.2,600
C.2,500
D.2,400
E.2,333
forecast was 2600?
A.2,600
B.2,760
C.2,800
D.3,840
E.3,000
144.What is the annual rate of change (slope) of the least squares trend line for these data?
A.0
B.200
C.400
D.180
E.360
A.3,600
B.3,500
C.3,400
D.3,300
E.3,200
The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the
one new tanning booth based on the following historical data:
146.What is this month's forecast using the naive approach?

A.100
B.160
C.130
D.140
E.120
147.What is this month's forecast using a four-month weighted moving average with weights of .4, .3, .2,
and .1?
A.120
B.129
C.141
D.135
E.140
148.What is this month's forecast using exponential smoothing with alpha = .2, if August's forecast was
145?
A.144
B.140
C.142
D.148
E.163
149.What is the monthly rate of change (slope) of the least squares trend line for these data?
A.320
B.102
C.8
D.-0.4
E.-8
150.What is this month's forecast using the least squares trend line for these data?
A.1,250
B.128.6
C.102
D.158
E.164
151.Which of the following mechanisms for enhancing profitability is most likely to result from improving
short term forecast performance?
A.increased inventory
B.reduced flexibility
C.higher-quality products
D.greater customer satisfaction
E.greater seasonality
152.Which of the following changes would tend to shorten the time frame for short term forecasting?
A.bringing greater variety into the product mix
B.increasing the flexibility of the production system
C.ordering fewer weather-sensitive items
D.adding more special-purpose equipment
E.none of the above
153.Which of the following helps improve supply chain forecasting performance?

A.contracts that require supply chain members to formulate long term forecasts
B.penalties for supply chain members that adjust forecasts
C.sharing forecasts or demand data across the supply chain
D.increasing lead times for critical supply chain members
E.increasing the number of suppliers at critical junctures in the supply chain
154.Inaccuracies in forecasts along the supply chain lead to:

A.shortages or excesses of materials
B.reduced customer service
C.excess capacity
D.missed deliveries
E.all of the above
155.Which of the following is the most valuable piece of information the sales force can bring into
forecasting situations?
A.what customers are most likely to do in the future
B.what customers most want to do in the future
C.what customers' future plans are
D.whether customers are satisfied or dissatisfied with their performance in the past
E.what the salesperson's appropriate sales quota should be
157.What is this year's forecast using a four-year simple moving average?
forecast was 45?
159.What are this and next year's forecasts using the least squares trend line for these data?
160.What is this year's forecast using trend adjusted (double) smoothing with alpha = 0.2 and beta = 0.1, if
the forecast for last year was 56, the forecast for two years ago was 46, and the trend estimate for last year's
forecast was 7?
161.What is the centered moving average for spring two years ago?
162.What is the spring's seasonal relative?
163.What is the linear regression trend line for these data (t = 0 for spring, three years ago)?
164.What is this year's seasonally adjusted forecast for each season?
ch3 Key
1.Forecasting techniques generally assume an existing causal system that will continue to exist in the
future.
TRUE
Forecasts depend on the rules of the game remaining reasonably constant.
AACSB: Reflective Thinking

Blooms: Remember
Difficulty: Medium
Learning Objective: 03-03 Evaluate at least three qualitative forecasting techniques and the advantages and disadvantages of each.
Stevenson - Chapter 03 #1
Topic Area: Features Common to All Forecasts
2.For new products in a strong growth mode, a low alpha will minimize forecast errors when using
exponential smoothing techniques.
large alpha for strong growth mode
FALSE
If growth is strong, alpha should be large so that the model will catch up more quickly.

Blooms: Understand
Difficulty: Medium
Learning Objective: 03-05 Describe averaging techniques; trend and seasonal techniques; and regression analysis; and solve typical problems.
Topic Area: Forecasts Based on Time-Series Data
flexible
3.Once accepted by managers, forecasts should be held firm regardless of new input since many plans have
been made using the original forecast.
FALSE
Flexibility to accommodate major changes is important to good forecasting.

Blooms: Understand
Difficulty: Easy
Learning Objective: 03-02 Outline the steps in the forecasting process.
Topic Area: Steps in the Forecasting Process
4.Forecasts for groups of items tend to be less accurate than forecasts for individual items because forecasts
for individual items don't include as many influencing factors.
FALSE
Forecasting for an individual item is more difficult than forecasting for a number of items.

Blooms: Understand
Difficulty: Medium
5.Forecasts help managers plan both the system itself and provide valuable information for using the
system.
TRUE
Both planning and use are shaped by forecasts.

Blooms: Remember
Difficulty: Easy
Learning Objective: 03-01 List the elements of a good forecast.
Topic Area: Introduction
6.Organizations that are capable of responding quickly to changing requirements can use a shorter forecast
horizon and therefore benefit from more accurate forecasts.
TRUE
If an organization can react quicker, its forecasts need not be so long term.

Blooms: Understand
Difficulty: Medium
Topic Area: Elements of a Good Forecast
7.When new products or services are introduced, focus forecasting models are an attractive option.
FALSE
Because focus forecasting models depend on historical data, they're not so attractive for newly introduced
products or services.

Blooms: Remember
Difficulty: Easy
8.The purpose of the forecast should be established first so that the level of detail, amount of resources, and
accuracy level can be understood.
TRUE
All of these considerations are shaped by what the forecast will be used for.

Blooms: Remember
Difficulty: Medium
Topic Area: Steps in the Forecasting Process
9.Forecasts based on time series (historical) data are referred to as associative forecasts.
FALSE
Forecasts based on time series data are referred to as time-series forecasts.

Blooms: Remember
Difficulty: Easy
Topic Area: Associative Forecasting Techniques
10.Time series techniques involve identification of explanatory variables that can be used to predict future
demand.
FALSE
Associate forecasts involve identifying explanatory variables.

Blooms: Remember
Difficulty: Hard
Learning Objective: 03-04 Compare and contrast qualitative and quantitative approaches to forecasting.
11.A consumer survey is an easy and sure way to obtain accurate input from future customers since most
people enjoy participating in surveys.
FALSE
Most people do not enjoy participating in surveys.

Blooms: Remember
Difficulty: Easy
Topic Area: Qualitative Forecasts
12.The Delphi approach involves the use of a series of questionnaires to achieve a consensus forecast.
TRUE
A consensus among divergent perspectives is developed using questionnaires.

Blooms: Remember
Difficulty: Easy
13.Exponential smoothing adds a percentage (called alpha) of last period's forecast to estimate next period's
demand.
FALSE
Exponential smoothing adds a percentage to the last period's forecast error.

Blooms: Remember
Difficulty: Medium
14.The shorter the forecast period, the more accurately the forecasts tend to track what actually happens.
TRUE
Long-term forecasting is much more difficult to do accurately.

Blooms: Understand
Difficulty: Easy
Learning Objective: 03-07 Compare two ways of evaluating and controlling forecasts.
Topic Area: Monitoring the Forecast
15.Forecasting techniques that are based on time series data assume that future values of the series will
duplicate past values.
FALSE
Time-series forecast assume that future patterns in the series will mimic past patterns in the series.

Blooms: Understand
Difficulty: Medium
16.Trend adjusted exponential smoothing uses double smoothing to add twice the forecast error to last
period's actual demand.
FALSE
Trend adjusted smoothing smoothes both random and trend-related variation.

Blooms: Remember
Difficulty: Medium
17.Forecasts based on an average tend to exhibit less variability than the original data.
TRUE
Averaging is a way of smoothing out random variability.

Blooms: Understand
Difficulty: Medium
18.The naive approach to forecasting requires a linear trend line.

FALSE
The nave approach is useful in a wider variety of settings.

Blooms: Remember
Difficulty: Easy
19.The naive forecast is limited in its application to series that reflect no trend or seasonality.
FALSE
When a trend or seasonality is present, the nave forecast is more limited in its application.

Blooms: Understand
Difficulty: Easy
20.The naive forecast can serve as a quick and easy standard of comparison against which to judge the cost
and accuracy of other techniques.
TRUE
Often the nave forecast performs reasonably well when compared to more complex techniques.

Blooms: Understand
Difficulty: Easy
21.A moving average forecast tends to be more responsive to changes in the data series when more data
points are included in the average.
FALSE
More data points reduce a moving average forecast's responsiveness.

Blooms: Understand
Difficulty: Medium
22.In order to update a moving average forecast, the values of each data point in the average must be
known.
TRUE
The moving average cannot be updated until the most recent value is known.

Blooms: Understand
Difficulty: Hard
23.Forecasts of future demand are used by operations people to plan capacity.

TRUE
Capacity decisions are made for the future and therefore depend on forecasts.

Blooms: Remember
Difficulty: Easy
Topic Area: Introduction
24.An advantage of a weighted moving average is that recent actual results can be given more importance
than what occurred a while ago.
TRUE
Weighted moving averages can be adjusted to make more recent data more important in setting the forecast.

Blooms: Understand
Difficulty: Medium
25.Exponential smoothing is a form of weighted averaging.

TRUE
The most recent period is given the most weight, but prior periods also factor in.

Blooms: Understand
Difficulty: Medium
26.A smoothing constant of .1 will cause an exponential smoothing forecast to react more quickly to a
sudden change than a smoothing constant value of .3.
FALSE
Smaller smoothing constants result in less reactive forecast models.

Blooms: Understand
Difficulty: Hard
27.The T in the model TAF = S+T represents the time dimension (which is usually expressed in weeks or
months).
FALSE
The T represents the trend dimension.

Blooms: Remember
Difficulty: Medium
28.Trend adjusted exponential smoothing requires selection of two smoothing constants.

TRUE
One is for the trend and one is for the random error.

Blooms: Remember
Difficulty: Easy
29.An advantage of "trend adjusted exponential smoothing" over the "linear trend equation" is its ability to
adjust over time to changes in the trend.
TRUE
A linear trend equation assumes a constant trend; trend adjusted smoothing allows for changes in the
underlying trend.

Blooms: Remember
Difficulty: Medium
30.A seasonal relative (or seasonal indexes) is expressed as a percentage of average or trend.
TRUE
Seasonal relatives are used when the seasonal effect is multiplicative rather than additive.

Blooms: Remember
Difficulty: Medium
31.In order to compute seasonal relatives, the trend of past data must be computed or known which means
that for brand new products this approach can't be used.
TRUE
Computing seasonal relatives depends on past data being available.

Blooms: Understand
Difficulty: Medium
32.Removing the seasonal component from a data series (de-seasonalizing) can be accomplished by
dividing each data point by its appropriate seasonal relative.
TRUE
Deseasonalized data points have been adjusted for seasonal influences.

Blooms: Remember
Difficulty: Hard
33.If a pattern appears when a dependent variable is plotted against time, one should use time series
analysis instead of regression analysis.
TRUE
Patterns reflect influences such as trends or seasonality that go against regression analysis assumptions.

Blooms: Remember
Difficulty: Hard
Learning Objective: 03-08 Assess the major factors and trade-offs to consider when choosing a forecasting technique.
34.Curvilinear and multiple regression procedures permit us to extend associative models to relationships
that are non-linear or involve more than one predictor variable.
TRUE
Regression analysis can be used in a variety of settings.

Blooms: Remember
Difficulty: Medium
35.The sample standard deviation of forecast error is equal to the square root of MSE.
TRUE
The MSE is equal to the sample variance of the forecast error.

Blooms: Remember
Difficulty: Easy
Topic Area: Forecast Accuracy
36.Correlation measures the strength and direction of a relationship between variables.

TRUE
The association between two variations is summarized in the correlation coefficient.

Blooms: Remember
Difficulty: Medium
37.MAD is equal to the square root of MSE which is why we calculate the easier MSE and then calculate
the more difficult MAD.
FALSE
MAD is the mean absolute deviation.

Blooms: Remember
Difficulty: Medium
Learning Objective: 03-06 Explain three measures of forecast accuracy.
38.In exponential smoothing, an alpha of 1.0 will generate the same forecast that a nave forecast would
yield.
TRUE
With alpha equal to 1 we are using a nave forecasting method.

Blooms: Understand
Difficulty: Medium
39.A forecast method is generally deemed to perform adequately when the errors exhibit an identifiable
pattern.
FALSE
Forecast methods are generally considered to be performing adequately when the errors appear to be
randomly distributed.

Blooms: Understand
Difficulty: Medium
40.A control chart involves setting action limits for cumulative forecast error.
FALSE
Control charts set action limits for the tracking signal.

Blooms: Remember
Difficulty: Medium
41.A tracking signal focuses on the ratio of cumulative forecast error to the corresponding value of MAD.
TRUE
Large absolute values of the tracking signal suggest a fundamental change in the forecast model's
performance.

Blooms: Remember
Difficulty: Medium
42.The use of a control chart assumes that errors are normally distributed about a mean of zero.
TRUE
Over time, a forecast model's tracking signal should fluctuate randomly about a mean of zero.

Blooms: Remember
Difficulty: Hard
43.Bias exists when forecasts tend to be greater or less than the actual values of time series.
TRUE
A tendency in one direction is defined as bias.

Blooms: Remember
Difficulty: Easy
44.Bias is measured by the cumulative sum of forecast errors.

TRUE
Bias would result in the cumulative sum of forecast errors being large in absolute value.

Blooms: Remember
Difficulty: Medium
45.Seasonal relatives can be used to de-seasonalize data or incorporate seasonality in a forecast.

TRUE
Seasonal relatives are used to de-seasonalize data to forecast future values of the underlying trend, and they
are also used to re-seasonalize de-seasonalized forecasts.

Blooms: Remember
Difficulty: Medium
46.The best forecast is not necessarily the most accurate.

TRUE
More accuracy often comes at too high a cost to be worthwhile.

Blooms: Understand
Difficulty: Medium
47.A proactive approach to forecasting views forecasts as probable descriptions of future demand, and
requires action to be taken to meet that demand.
FALSE
Proactive approaches involve taking action to influence demand.

Blooms: Understand
Difficulty: Hard
Topic Area: Using Forecast Information
48.Simple linear regression applies to linear relationships with no more than three independent variables.
FALSE
Simple linear regression involves only one independent variable.

Blooms: Remember
Difficulty: Medium
49.An important goal of forecasting is to minimize the average forecast error.

FALSE
Regardless of the model chosen, so long as there is no fundamental bias average forecast error will be zero.

Blooms: Understand
Difficulty: Medium
50.Forecasting techniques such as moving averages, exponential smoothing, and the naive approach all
represent smoothed (averaged) values of time series data.
FALSE
The nave approach involves no smoothing.

Blooms: Remember
Difficulty: Medium
51.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.

TRUE
Larger values for alpha result in more responsive models.

Blooms: Understand
Difficulty: Medium
52.Forecasts based on judgment and opinion don't include

A.executive opinion
B.salesperson opinion
C.second opinions
D.customer surveys
E.Delphi methods
Second opinions generally refer to medical diagnoses, not demand forecasting.

Blooms: Remember
Difficulty: Medium
53.In business, forecasts are the basis for:

A.capacity planning
B.budgeting
C.sales planning
D.production planning
E.all of the above
A wide variety of areas depend on forecasting.

Blooms: Understand
Difficulty: Easy
54.Which of the following features would not generally be considered common to all forecasts?
A.Assumption of a stable underlying causal system.
B.Actual results will differ somewhat from predicted values.
C.Historical data is available on which to base the forecast.
D.Forecasts for groups of items tend to be more accurate than forecasts for individual items.
E.Accuracy decreases as the time horizon increases.
In some forecasting situations historical data are not available.

Blooms: Understand
Difficulty: Hard
55.Which of the following is not a step in the forecasting process?

A.determine the purpose and level of detail required
B.eliminate all assumptions
C.establish a time horizon
D.select a forecasting model
E.monitor the forecast
We cannot eliminate all assumptions.

Blooms: Remember
Difficulty: Medium
56.Minimizing the sum of the squared deviations around the line is called:
A.mean squared error technique
B.mean absolute deviation
C.double smoothing
D.least squares estimation
E.predictor regression
Least squares estimations minimizes the sum of squared deviations around the estimated regression
function.

Blooms: Remember
Difficulty: Medium
57.The two general approaches to forecasting are:

A.mathematical and statistical
B.qualitative and quantitative
C.judgmental and qualitative
D.historical and associative
E.precise and approximation
Forecast approaches are either quantitative or qualitative.

Blooms: Remember
Difficulty: Easy
Learning Objective: 03-04 Compare and contrast qualitative and quantitative approaches to forecasting.
Topic Area: Approaches to Forecasting
58.Which of the following is not a type of judgmental forecasting?

A.executive opinions
B.sales force opinions
C.consumer surveys
D.the Delphi method
E.time series analysis
Time series analysis is a quantitative approach.

Blooms: Remember
Difficulty: Easy
59.Accuracy in forecasting can be measured by:

A.MSE
B.MRP
C.MAPE
D.MTM
E.A & C
MSE is mean squared error; MAPE is mean absolute percent error.

Blooms: Remember
Difficulty: Hard
60.Which of the following would be an advantage of using a sales force composite to develop a demand
forecast?
A.The sales staff is least affected by changing customer needs.
B.The sales force can easily distinguish between customer desires and probable actions.
C.The sales staff is often aware of customers' future plans.
D.Salespeople are least likely to be influenced by recent events.
E.Salespeople are least likely to be biased by sales quotas.
Members of the sales force should be the organization's tightest link with its customers.

Blooms: Understand
Difficulty: Hard
61.Which phrase most closely describes the Delphi technique?

A.associative forecast
B.consumer survey
C.series of questionnaires
D.developed in India
E.historical data
The questionnaires are a way of fostering a consensus among divergent perspectives.

Blooms: Remember
Difficulty: Easy
62.The forecasting method which uses anonymous questionnaires to achieve a consensus forecast is:
A.sales force opinions
B.consumer surveys
C.the Delphi method
D.time series analysis
E.executive opinions
Anonymity is important in Delphi efforts.

Blooms: Remember
Difficulty: Easy
63.One reason for using the Delphi method in forecasting is to:

A.avoid premature consensus (bandwagon effect)
B.achieve a high degree of accuracy
C.maintain accountability and responsibility
D.be able to replicate results
E.prevent hurt feelings
A bandwagon can lead to popular but potentially inaccurate viewpoints to drown up other important
considerations.

Blooms: Remember
Difficulty: Medium
64.Detecting non-randomness in errors can be done using:

A.MSEs
B.MAPs
C.Control Charts
D.Correlation Coefficients
E.Strategies
Control charts graphically depict the statistical behavior of forecast errors.

Blooms: Remember
Difficulty: Medium
65.Gradual, long-term movement in time series data is called:

A.seasonal variation
B.cycles
C.irregular variation
D.trend
E.random variation
Trends move the time series in a long-term direction.

Blooms: Remember
Difficulty: Easy
66.The primary difference between seasonality and cycles is:

A.the duration of the repeating patterns
B.the magnitude of the variation
C.the ability to attribute the pattern to a cause
D.the direction of the movement
E.there are only 4 seasons but 30 cycles
Seasons happen within time periods; cycles happen across multiple time periods.

Blooms: Remember
Difficulty: Hard
67.Averaging techniques are useful for:

A.distinguishing between random and non-random variations
B.smoothing out fluctuations in time series
C.eliminating historical data
D.providing accuracy in forecasts
E.average people
Smoothing helps forecasters see past random error.

Blooms: Remember
Difficulty: Hard
68.Putting forecast errors into perspective is best done using

A.Exponential smoothing
B.MAPE
C.Linear decision rules
D.MAD
E.Hindsight
MAPE depicts the forecast error relative to what was being forecast.

Blooms: Understand
Difficulty: Medium
69.Using the latest observation in a sequence of data to forecast the next period is:
A.a moving average forecast
B.a naive forecast
C.an exponentially smoothed forecast
D.an associative forecast
E.regression analysis
Only one piece of information is needed for a nave forecast.

Blooms: Remember
Difficulty: Easy
70.For the data given below, what would the naive forecast be for the next period (period #5)?
A.58
B.62
C.59.5
D.61
E.cannot tell from the data given
Period 5's forecast would be period 4's demand.
AACSB: Analytic
Blooms: Apply
Difficulty: Easy
71.Moving average forecasting techniques do the following:

A.immediately reflect changing patterns in the data
B.lead changes in the data
C.smooth variations in the data
D.operate independently of recent data
E.assist when organizations are relocating
Variation is smoothed out in moving average forecasts.

Blooms: Remember
Difficulty: Hard
72.Which is not a characteristic of simple moving averages applied to time series data?
C.lags changes in the data
D.requires only last period's forecast and actual data
Simple moving averages can require several periods of data.

Blooms: Understand
Difficulty: Medium
73.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:
A.decreased
B.increased
C.multiplied by a larger alpha
D.multiplied by a smaller alpha
E.eliminated if the MAD is greater than the MSE
Fewer data points result in more responsive moving averages.

Blooms: Understand
Difficulty: Hard
74.A forecast based on the previous forecast plus a percentage of the forecast error is:
A.a naive forecast
B.a simple moving average forecast
C.a centered moving average forecast
D.an exponentially smoothed forecast
E.an associative forecast
Exponential smoothing uses the previous forecast error to shape the next forecast.

Blooms: Remember
Difficulty: Hard
75.Which is not a characteristic of exponential smoothing?

C.has an easily altered weighting scheme
D.has minimal data storage requirements
The most recent period of demand is given the most weight in exponential smoothing.

Blooms: Remember
Difficulty: Hard
76.Which of the following smoothing constants would make an exponential smoothing forecast equivalent
to a naive forecast?
A.0
B..01
C..1
D..5
E.1.0
An alpha of 1.0 leads to a nave forecast.

Blooms: Understand
Difficulty: Medium
77.Simple exponential smoothing is being used to forecast demand. The previous forecast of 66 turned out
to be four units less than actual demand. The next forecast is 66.6, implying a smoothing constant, alpha,
equal to:
A..01
B..10
C..15
D..20
E..60
A previous period's forecast error of 4 units would lead to a change in the forecast of 0.6 if alpha equals
0.15.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
78.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?
A.36.9
B.57.5
C.60.5
D.62.5
E.65.5
Multiply the previous period's forecast error (-5) by alpha and then add to the previous period's forecast.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
79.Given an actual demand of 105, a forecasted value of 97, and an alpha of .4, the simple exponential
smoothing forecast for the next period would be:
A.80.8
B.93.8
C.100.2
D.101.8
E.108.2
Multiply the previous period's forecast error (8) by alpha and then add to the previous period's forecast.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
80.Which of the following possible values of alpha would cause exponential smoothing to respond the most
quickly to forecast errors?
A.0
B..01
C..05
D..10
E..15
Larger values for alpha correspond with greater responsiveness.

Blooms: Understand
Difficulty: Medium
81.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?
A.40,450
B.40,600
C.42,100
D.42,250
E.42,400
July would be period 3, so the forecast would be 40,000 + 150(3).
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
82.In trend-adjusted exponential smoothing, the trend adjusted forecast (TAF) consists of:
A.an exponentially smoothed forecast and a smoothed trend factor
B.an exponentially smoothed forecast and an estimated trend value
C.the old forecast adjusted by a trend factor
D.the old forecast and a smoothed trend factor
E.a moving average and a trend factor
Both random variation and the trend are smoothed in TAF models.

Blooms: Remember
Difficulty: Hard
83.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.
A.quantity, percentage
B.percentage, quantity
C.quantity, quantity
D.percentage, percentage
E.qualitative, quantitative
The additive model simply adds a seasonal adjustment to the de-seasonalized forecast. The multiplicative
model adjusts the de-seasonalized forecast by multiplying it by a season relative or index.

Blooms: Remember
Difficulty: Hard

84.Which technique is used in computing seasonal relatives?

A.double smoothing
B.Delphi
C.Mean Squared Error (MSE)
D.centered moving average
The centered moving average serves as the basis point for computing seasonal relatives.

Blooms: Remember
Difficulty: Medium
85.A persistent tendency for forecasts to be greater than or less than the actual values is called:
A.bias
B.tracking
C.control charting
D.positive correlation
E.linear regression
Bias is a tendency for a forecast to be above (or below) the actual value.

Blooms: Remember
Difficulty: Medium
86.Which of the following might be used to indicate the cyclical component of a forecast?
A.leading variable
B.Mean Squared Error (MSE)
C.Delphi technique
E.Mean Absolute Deviation (MAD)
Leading variables, such as births in a given year, can correlate strongly with long-term phenomena such as
cycles.

Blooms: Remember
Difficulty: Medium

87.The primary method for associative forecasting is:

A.sensitivity analysis
B.regression analysis
C.simple moving averages
D.centered moving averages
Regression analysis is an associative forecasting technique.

Blooms: Remember
Difficulty: Medium
88.Which term most closely relates to associative forecasting techniques?

A.time series data
B.expert opinions
C.Delphi technique
D.consumer survey
E.predictor variables
Associate techniques use predictor variables.

Blooms: Remember
Difficulty: Medium
89.Which of the following corresponds to the predictor variable in simple linear regression?
A.regression coefficient
B.dependent variable
C.independent variable
D.predicted variable
E.demand coefficient
Demand is the typical dependent variable when forecasting with simple linear regression.

Blooms: Remember
Difficulty: Medium
90.The mean absolute deviation (MAD) is used to:

A.estimate the trend line
B.eliminate forecast errors
C.measure forecast accuracy
D.seasonally adjust the forecast
E.all of the above
MAD is one way of evaluating forecast performance.

Blooms: Remember
Difficulty: Medium
91.Given forecast errors of 4, 8, and - 3, what is the mean absolute deviation?

A.4
B.3
C.5
D.6
E.12
Convert each error into an absolute value and then average.
AACSB: Analytic
Blooms: Apply
Difficulty: Easy
92.Given forecast errors of 5, 0, - 4, and 3, what is the mean absolute deviation?

A.4
B.3
C.2.5
D.2
E.1
Convert each error into an absolute value and then average.
AACSB: Analytic
Blooms: Apply
Difficulty: Easy
93.Given forecast errors of 5, 0, - 4, and 3, what is the bias?

A.- 4
B.4
C.5
D.12
E.6
Sum the forecast errors.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
94.Which of the following is used for constructing a control chart?

A.mean absolute deviation (MAD)
B.mean squared error (MSE)
C.tracking signal (TS)
D.bias
E.none of the above
The mean squared error leads to an estimate for the sample forecast standard deviation.

Blooms: Remember
Difficulty: Medium
95.The two most important factors in choosing a forecasting technique are:

A.cost and time horizon
B.accuracy and time horizon
C.cost and accuracy
D.quantity and quality
E.objective and subjective components
More accurate forecasts cost more but may not be worth the additional cost.

Blooms: Remember
Difficulty: Medium
Topic Area: Choosing a Forecasting Techniques
96.The degree of management involvement in short range forecasts is:

A.none
B.low
C.moderate
D.high
E.total
Short range forecasting tends to be fairly routine.

Blooms: Remember
Difficulty: Easy
Topic Area: Choosing a Forecasting Techniques
97.Which of the following is not necessarily an element of a good forecast?

A.estimate of accuracy
B.timeliness
C.meaningful units
D.low cost
E.written
A good forecast can be quite costly if necessary.

Blooms: Understand
Difficulty: Medium
98.Current information on _________ can have a significant impact on forecast accuracy:

A.prices
B.promotion
C.inventory
D.competition
E.all of the above
Demand in the future could be subject to decision-making prompted by prices, promotions, inventory or
competition. Accuracy will be affected if these are (or are not) taken into consideration.

Blooms: Understand
Difficulty: Easy
99.A managerial approach toward forecasting which seeks to actively influence demand is:
A.reactive
B.proactive
C.influential
D.protracted
E.retroactive
Simply responding to demand is a reactive approach.

Blooms: Remember
Difficulty: Easy
Topic Area: Using Forecast Information
100.Customer service levels can be improved by better:

A.mission statements
B.control charting
C.short term forecast accuracy
E.customer selection
More accurate short-term forecasts enable organization's to better accommodate customer requests.

Blooms: Understand
Difficulty: Hard
Topic Area: Operations Strategy
101.Given the following historical data, what is the simple three-period moving average forecast for period
6?
A.67
B.115
C.69
D.68
E.68.67
Average demand from periods 3 through 5.
AACSB: Analytic
Blooms: Apply
Difficulty: Easy
102.Given the following historical data and weights of .5, .3, and .2, what is the three-period moving
average forecast for period 5?
A.144.20
B.144.80
C.144.67
D.143.00
E.144.00
Multiply period 4 (144) by .5, period 3 (148) by .3 and period 2 (142) by .2, then sum these products.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
103.Use of simple linear regression analysis assumes that:

A.Variations around the line are random.
B.Deviations around the line are normally distributed.
C.Predictions are to be made only within the range of observed values of the predictor variable.
D.all of the above
E.none of the above
A through C are important assumptions underpinning simple linear regression.

Blooms: Remember
Difficulty: Hard
104.Given forecast errors of - 5, - 10, and +15, the MAD is:

A.0
B.10
C.30
D.175
E.none of these
Convert these errors into absolute value, then average.
AACSB: Analytic
Blooms: Apply
Difficulty: Easy
105.Develop a forecast for the next period, given the data below, using a 3-period moving average.
Feedback: Average demand from periods 3 through 5.
AACSB: Analytic
Blooms: Apply
Difficulty: Easy
106.Consider the data below:
Using exponential smoothing with alpha = .2, and assuming the forecast for period 11 was 80, what would
the forecast for period 14 be?
Feedback: The forecast error in period 13 (2.84) is multiplied by the smoothing constant. This is then added
to the period 13 forecast to get the period 14 forecast.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
107.A manager is using exponential smoothing to predict merchandise returns at a suburban branch of a
department store chain. Given a previous forecast of 140 items, an actual number of returns of 148 items,
and a smoothing constant equal to .15, what is the forecast for the next period?
Feedback: The forecast error in the previous period is multiplied by the smoothing constant. This is then
added to the previous period's forecast to get the upcoming period's forecast.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
108.A manager is using the equation below to forecast quarterly demand for a product:
Yt = 6,000 + 80t where t = 0 at Q2 of last year
Quarter relatives are Q1 = .6, Q2 = .9, Q3 = 1.3, and Q4 = 1.2.
What forecasts are appropriate for the last quarter of this year and the first quarter of next year?
For Q4 of this year t = 6

For Q1 of next year t = 7
Feedback: Adjust de-seasonalized forecasts by the quarterly seasonal relatives.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
109.Over the past five years, a firm's sales have averaged 250 units in the first quarter of each year, 100
units in the second quarter, 150 units in the third quarter, and 300 units in the fourth quarter. What are
appropriate quarter relatives for this firm's sales? Hint: Only minimal computations are necessary.
Feedback: Since a trend is not present, quarter relatives are simply a percentage of average, which is 200
units.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
110.A manager has been using a certain technique to forecast demand for gallons of ice cream for the past
six periods. Actual and predicted amounts are shown below. Would a naive forecast have produced better
results?
Summary:
Current method: MAD = 3.67; MSE = 16.8; 2s Control limits 8.2 (OK)
Nave method: MAD = 4.40; MSE = 30.0; 2s Control limits 11.0 (OK)
Feedback: Either MSE or MAD should be computed for both forecasts and compared. The demand data are
stable. Therefore, the most recent value of the series is a reasonable forecast for the next period of time,
justifying the nave approach. The current method is slightly superior both in terms of MAD and MSE.
Either method would be considered in control.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
111.A new car dealer has been using exponential smoothing with an alpha of .2 to forecast weekly new car
sales. Given the data below, would a naive forecast have provided greater accuracy? Explain. Assume an
initial exponential forecast of 60 units in period 2 (i.e., no forecast for period 1).
Summary:
Exponential method: MAD = 1.70; MSE = 6.34
Nave method: MAD = 3.00; MSE = 15.25
Feedback: The exponential forecast method appears to be superior because both MAD and MSE are lower
when it is used.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
112.A CPA firm has been using the following equation to predict annual demand for tax audits: Yt = 55 + 4t
Demand for the past few years is shown below. Is the forecast performing as well as it might? Explain.
MSE = 11/6 and s = = 3.41. Even with 2s limits (6.82) all values are within the limits. It seems, then, that
only random variation is present, so one might say that the forecast is working. One might also observe that
the first three errors are negative and the last three are positive. Although six observations constitute a
relatively small sample, it may be that the errors are cycling, and this would be a matter to investigate with
additional data.
Feedback: Either a tracking signal or a control chart is called for. To conduct these assessments, it is
necessary to generate the forecasts so that errors can be determined.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
113.Given the data below, develop a forecast for period 6 using a four-period weighted moving average and
weights of .4, .3, .2 and .1
.4(17) + .3(19) + .2(18) + .1(20) = 18.1

Feedback: Multiply demand observed in periods 2 through 5 by the appropriate weight, then sum these
products.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
114.Use linear regression to develop a predictive model for demand for burial vaults based on sales of
caskets.
A) Develop the regression equation.
Feedback: Least-squares estimation leads to this regression equation.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
117.Develop a linear trend equation for the data on bread deliveries shown below. Forecast deliveries for
period 11 through 14.
Yt = 518.2 + 52.164t r = +.935
Feedback: Formulate the regression equation using least squares estimation, then apply the result to periods
11 through 14.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
118.The president of State University wants to forecast student enrollments for this academic year based on
What is the forecast for this year using the naive approach?
A.18,750
B.19,500
C.21,000
D.22,000
E.22,800
This year's forecast would be last year's enrollment.
AACSB: Analytic
Blooms: Apply
Difficulty: Easy
119.Demand for the last four months was:
A) Predict demand for July using each of these methods:

1) a 3-period moving average
2) exponential smoothing with alpha equal to .20 (use a nave forecast for April for your first forecast)
B) If the naive approach had been used to predict demand for April through June, what would MAD have
been for those months?
Feedback: The nave approach leads to absolute forecast errors of 2 units in each period.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
120.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.
Feedback: Although Alternative #1 has the smaller MSE, it appears to be cycling and steady; Alternative #2
errors after the first three periods are small or zero. For the last six periods, Alternative #2 was much better,
suggesting that approach would be better.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
121.A manager uses this equation to predict demand: Yt = 20 + 4t. Over the past 8 periods, demand has
been as follows. Are the results acceptable? Explain.
Feedback: s = 2.10; 2s control limits are 4.20. Although all values are within control limits, the errors may
be exhibiting cyclical patterns, which would suggest nonrandomness.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
The president of State University wants to forecast student enrollments for this academic year based on the
following historical data:
Stevenson - Chapter 03
122.What is the forecast for this year using a four-year simple moving average?
A.18,750
B.19,500
C.21,000
D.22,650
E.22,800
Average enrollment from the last four years.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
123.What is the forecast for this year using exponential smoothing with alpha = 0.5, if the forecast for two
years ago was 16,000?
A.18,750
B.19,500
C.21,000
D.22,650
E.22,800
Multiply last year's forecast error by the smoothing constant, then add that adjusted error to last year's
forecast to get this year's forecast.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
A.18,750
B.19,500
C.21,000
D.22,650
E.22,800
Treat 5 years ago as period 0.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
125.What is the forecast for this year using trend adjusted (double) smoothing with alpha = .05 and beta =
0.3, if the forecast for last year was 21,000, the forecast for two years ago was 19,000, and the trend estimate
for last year's forecast was 1,500?
A.18,750
B.19,500
C.21,000
D.22,650
E.22,800
Smooth both the trend and the forecast to get this year's forecast.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
The business analyst for Video Sales, Inc. wants to forecast this year's demand for DVD decoders based on
126.What is the forecast for this year using the naive approach?
A.163
B.180
C.300
D.420
E.510
This year's forecast is last year's demand.
AACSB: Analytic
Blooms: Apply
Difficulty: Easy
127.What is the forecast for this year using a three-year weighted moving average with weights of .5, .3,
and .2?
A.163
B.180
C.300
D.420
E.510
Multiply the last three periods of demand by the appropriate weights, then sum the resulting products.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
128.What is the forecast for this year using exponential smoothing with alpha = .4, if the forecast for two
years ago was 750?
A.163
B.180
C.300
D.420
E.510
First formulate last year's exponentially smoothed forecast, then proceed.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
A.163
B.180
C.300
D.420
E.510
Treat the earliest period of demand as period 0, then formulate least squares estimates and proceed.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
130.What is the forecast for this year using trend adjusted (double) smoothing with alpha = 0.3 and beta =
0.2, if the forecast for last year was 310, the forecast for two years ago was 430, and the trend estimate for
last year's forecast was -150?
A.162.4
B.180.3
C.301.4
D.403.2
E.510.0
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
Professor Very Busy needs to allocate time next week to include time for office hours. He needs to forecast
the number of students who will seek appointments. He has gathered the following data:
131.What is this week's forecast using the naive approach?

A.45
B.50
C.52
D.65
E.78
This week's forecast is last week's demand.
AACSB: Analytic
Blooms: Apply
Difficulty: Easy
132.What is this week's forecast using a three-week simple moving average?

A.49
B.50
C.52
D.65
E.78
Average the three most recent weeks of deamdn.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
133.What is this week's forecast using exponential smoothing with alpha = .2, if the forecast for two weeks
ago was 90?
A.49
B.50
C.52
D.65
E.77
Formulate the forecast for last week, then use that to get this week's forecast.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
134.What is this week's forecast using the least squares trend line for these data?
A.49
B.50
C.52
D.65
E.78
Treat the earliest period as period 0, then formulate least squares coefficients and proceed.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
135.What is this week's forecast using trend adjusted (double) smoothing with alpha = 0.5 and beta = 0.1, if
the forecast for last week was 65, the forecast for two weeks ago was 75, and the trend estimate for last
week's forecast was -5?
A.49.3
B.50.6
C.51.3
D.65.4
E.78.7
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
A concert promoter is forecasting this year's attendance for one of his concerts based on the following
historical data:

A.22,000
B.20,000
C.18,000
D.15,000
E.12,000
This year's forecast is last year's attendance.
AACSB: Analytic
Blooms: Apply
Difficulty: Easy
137.What is this year's forecast using a two-year weighted moving average with weights of .7 and .3?
A.19,400
B.18,600
C.19,000
D.11,400
E.10,600
Multiply the two most recent periods by the appropriate weights, then sum the resulting products.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
forecast was 15,000?
A.20,000
B.19,000
C.17,500
D.16,000
E.15,000
Multiply last year's forecast error by the smoothing constant, then add that product to last year's forecast to
get this year's forecast.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
A.20,000
B.21,000
C.22,000
D.23,000
E.24,000
Treat the earliest year as period zero in formulating least squares coefficients.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
140.The previous trend line had predicted 18,500 for two years ago, and 19,700 for last year. What was the
mean absolute deviation (MAD) for these forecasts?
A.100
B.200
C.400
D.500
E.800
Convert each period's forecast error into absolute value, then average.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
The dean of a school of business is forecasting total student enrollment for this year's summer session
classes based on the following historical data:

A.2,000
B.2,200
C.2,800
D.3,000
E.none of the above
This year's forecast would be last year's enrollment.
AACSB: Analytic
Blooms: Apply
Difficulty: Easy
142.What is this year's forecast using a three-year simple moving average?

A.2,667
B.2,600
C.2,500
D.2,400
E.2,333
Average the most recent periods of enrollment.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
forecast was 2600?
A.2,600
B.2,760
C.2,800
D.3,840
E.3,000
Multiply last year's forecast error by the smoothing constant. Add the product to last year's forecast to get
this year's forecast.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
144.What is the annual rate of change (slope) of the least squares trend line for these data?
A.0
B.200
C.400
D.180
E.360
Treat the earliest period as period 0, then formulate the least squares slope.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
A.3,600
B.3,500
C.3,400
D.3,300
E.3,200
Treat the earliest period as period 0, then formulate the least squares coefficients and proceed.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the
one new tanning booth based on the following historical data:

146.What is this month's forecast using the naive approach?

A.100
B.160
C.130
D.140
E.120
This month's forecast is last month's demand.
AACSB: Analytic
Blooms: Apply
Difficulty: Easy
147.What is this month's forecast using a four-month weighted moving average with weights of .4, .3, .2,
and .1?
A.120
B.129
C.141
D.135
E.140
Multiply the four most recent periods of demand by the appropriate weights, then sum the resulting
products.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
148.What is this month's forecast using exponential smoothing with alpha = .2, if August's forecast was
145?
A.144
B.140
C.142
D.148
E.163
First calculate September's forecast, then use that to calculate this month's forecast.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
149.What is the monthly rate of change (slope) of the least squares trend line for these data?
A.320
B.102
C.8
D.-0.4
E.-8
Treat the earliest period as period 0, then formulate the least squares slope.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
150.What is this month's forecast using the least squares trend line for these data?
A.1,250
B.128.6
C.102
D.158
E.164
Treat the earliest period as period 0, then formulate the least squares coefficients and proceed.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
151.Which of the following mechanisms for enhancing profitability is most likely to result from improving
short term forecast performance?
A.increased inventory
B.reduced flexibility
C.higher-quality products
D.greater customer satisfaction
E.greater seasonality
Short term forecast performance won't necessarily improve product quality, but it does allow firms to better
satisfy their customers.

Blooms: Understand
Difficulty: Medium
152.Which of the following changes would tend to shorten the time frame for short term forecasting?
A.bringing greater variety into the product mix
B.increasing the flexibility of the production system
C.ordering fewer weather-sensitive items
D.adding more special-purpose equipment
E.none of the above
An increasingly flexible system permits more rapid responses to changing conditions, which allows firms to
reduce their forecast time horizon.

Blooms: Understand
Difficulty: Medium
153.Which of the following helps improve supply chain forecasting performance?

A.contracts that require supply chain members to formulate long term forecasts
B.penalties for supply chain members that adjust forecasts
C.sharing forecasts or demand data across the supply chain
D.increasing lead times for critical supply chain members
E.increasing the number of suppliers at critical junctures in the supply chain
Sharing forecasts and/or demand data is a means of ensuring that the supply chain's overall forecast is as
accurate as it can be.

Blooms: Understand
Difficulty: Easy
Topic Area: Forecasting and the Supply Chain
154.Inaccuracies in forecasts along the supply chain lead to:

A.shortages or excesses of materials
B.reduced customer service
C.excess capacity
D.missed deliveries
E.all of the above
Firms often react to poor forecasts by building safety capacity into their systems.

Blooms: Understand
Difficulty: Medium
Topic Area: Forecasting and the Supply Chain
155.Which of the following is the most valuable piece of information the sales force can bring into
forecasting situations?
A.what customers are most likely to do in the future
B.what customers most want to do in the future
C.what customers' future plans are
D.whether customers are satisfied or dissatisfied with their performance in the past
E.what the salesperson's appropriate sales quota should be
Knowledge about what customers are likely to do is much more valuable than information regarding what
customers plan or want to do.

Blooms: Understand
Difficulty: Medium
49
Feedback: This year's forecast would be last year's demand.
AACSB: Analytic
Blooms: Apply
Difficulty: Easy
157.What is this year's forecast using a four-year simple moving average?
(45.5)
Feedback: Average the four most recent periods of demand.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
forecast was 45?
(45.8)
Feedback: Multiply last year's forecast error by the smoothing constant. Add the resulting product to last
year's forecast to get this year's forecast.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
159.What are this and next year's forecasts using the least squares trend line for these data?
(62; 69)
Feedback: Treat the earliest period as period 0 in formulating least squares coefficients, then proceed.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard
160.What is this year's forecast using trend adjusted (double) smoothing with alpha = 0.2 and beta = 0.1, if
the forecast for last year was 56, the forecast for two years ago was 46, and the trend estimate for last year's
forecast was 7?
(61.76)
Feedback: Smooth both the trend and the forecasts using the appropriate smoothing coefficients.
AACSB: Analytic
Blooms: Apply
Difficulty: Hard

161.What is the centered moving average for spring two years ago?
29
Feedback: First average the four periods beginning fall three years ago. Then average the four periods
beginning spring two years ago. Then average these two averages.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
162.What is the spring's seasonal relative?
(Spring 0.91) (Summer 0.63) (Fall 1.03) (Winter 1.43)

Feedback: Divide data points by centered moving averages where moving averages are available. Average
the resulting values across the seasons to get the seasonal relatives.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
163.What is the linear regression trend line for these data (t = 0 for spring, three years ago)?
(y=17 + 2.33t)
Feedback: Used de-seasonalized data points to formulate least squares coefficients.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
164.What is this year's seasonally adjusted forecast for each season?
(Spring 40.93) (Summer 29.81) (Fall 51.14) (Winter 74.37)

Feedback: First forecast each period's de-seasonalized value (e.g., Spring is period 12). Then multiply the
de-seasonalized forecast by the appropriate seasonal relative.
AACSB: Analytic
Blooms: Apply
Difficulty: Medium
ch3 Summary
Category
AACSB:Analytic
AACSB:ReflectiveThinking
Blooms:Apply
Blooms:Remember
Blooms:Understand
Difficulty:Easy
Difficulty:Hard
Difficulty:Medium
LearningObjective:03-01Listtheelementsofagoodforecast.
LearningObjective:03-02Outlinethestepsintheforecastingproces
s.
LearningObjective:03-03Evaluateatleastthreequalitativeforecast
ingtechniquesandtheadvantagesanddisadvantagesofeach.
LearningObjective:03-04Compareandcontrastqualitativeandqua
ntitativeapproachestoforecasting.
LearningObjective:03-05Describeaveragingtechniques;trendand
seasonaltechniques;andregressionanalysis;andsolvetypicalprobl
ems.
LearningObjective:03-06Explainthreemeasuresofforecastaccura
cy.
LearningObjective:03-07Comparetwowaysofevaluatingandcont
rollingforecasts.
LearningObjective:03-08Assessthemajorfactorsandtradeoffstoconsiderwhenchoosingaforecastingtechnique.
Stevenson-Chapter03
TopicArea:ApproachestoForecasting
TopicArea:AssociativeForecastingTechniques
TopicArea:ChoosingaForecastingTechniques
TopicArea:ElementsofaGoodForecast
TopicArea:FeaturesCommontoAllForecasts
TopicArea:ForecastAccuracy
TopicArea:ForecastingandtheSupplyChain
TopicArea:ForecastsBasedonTime-SeriesData
TopicArea:Introduction
TopicArea:MonitoringtheForecast
TopicArea:OperationsStrategy
TopicArea:QualitativeForecasts
TopicArea:StepsintheForecastingProcess
TopicArea:UsingForecastInformation
#ofQuestions
66
98
66
61
37
38
40
86
3
13
9
2
101
11
18
7
172
4
13
2
3
5
16
2
94
2
7
3
9
2
2
TopicArea:OperationsStrategy
TopicArea:QualitativeForecasts
TopicArea:StepsintheForecastingProcess
TopicArea:UsingForecastInformation
3
9
2
2

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ch3

18.The naive approach to forecasting requires a linear trend line.

23.Forecasts of future demand are used by operations people to plan capacity.

25.Exponential smoothing is a form of weighted averaging.

28.Trend adjusted exponential smoothing requires selection of two smoothing constants.

36.Correlation measures the strength and direction of a relationship between variables.

44.Bias is measured by the cumulative sum of forecast errors.

45.Seasonal relatives can be used to de-seasonalize data or incorporate seasonality in a forecast.

46.The best forecast is not necessarily the most accurate.

49.An important goal of forecasting is to minimize the average forecast error.

52.Forecasts based on judgment and opinion don't include

53.In business, forecasts are the basis for:

55.Which of the following is not a step in the forecasting process?

A.mean squared error technique

57.The two general approaches to forecasting are:

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

59.Accuracy in forecasting can be measured by:

61.Which phrase most closely describes the Delphi technique?

A.sales force opinions

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

64.Detecting non-randomness in errors can be done using:

65.Gradual, long-term movement in time series data is called:

66.The primary difference between seasonality and cycles is:

67.Averaging techniques are useful for:

68.Putting forecast errors into perspective is best done using

71.Moving average forecasting techniques do the following:

A.a naive forecast

75.Which is not a characteristic of exponential smoothing?

84.Which technique is used in computing seasonal relatives?

87.The primary method for associative forecasting is:

88.Which term most closely relates to associative forecasting techniques?

90.The mean absolute deviation (MAD) is used to:

91.Given forecast errors of 4, 8, and - 3, what is the mean absolute deviation?

92.Given forecast errors of 5, 0, - 4, and 3, what is the mean absolute deviation?

93.Given forecast errors of 5, 0, - 4, and 3, what is the bias?

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

95.The two most important factors in choosing a forecasting technique are:

96.The degree of management involvement in short range forecasts is:

97.Which of the following is not necessarily an element of a good forecast?

98.Current information on _________ can have a significant impact on forecast accuracy:

100.Customer service levels can be improved by better:

103.Use of simple linear regression analysis assumes that:

B.Deviations around the line are normally distributed.

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

106.Consider the data below:

A) Develop the regression equation.

119.Demand for the last four months was:

A) Predict demand for July using each of these methods:

131.What is this week's forecast using the naive approach?

132.What is this week's forecast using a three-week simple moving average?

136.What is this year's forecast using the naive approach?

141.What is this year's forecast using the naive approach?

E.none of the above

142.What is this year's forecast using a three-year simple moving average?

146.What is this month's forecast using the naive approach?

E.none of the above

153.Which of the following helps improve supply chain forecasting performance?

154.Inaccuracies in forecasts along the supply chain lead to:

156.What is this year's forecast using the naive approach?

157.What is this year's forecast using a four-year simple moving average?

162.What is the spring's seasonal relative?

164.What is this year's seasonally adjusted forecast for each season?

Forecasts depend on the rules of the game remaining reasonably constant.