Deck 6: Demand Management, Forecasting, and Aggregate Planning

Question 1

A department store hiring temporary workers to deal with increased demand during the holiday season is practicing what approach?

A) Seasonal management
B) Store management
C) Demand management
D) Labor management

Answer 1

C

Question 2

What department within a firm uses demand forecasts to manage inventory and transportation?

A) Operations
B) Distribution
C) Marketing
D) Supply management

Answer 2

B

Question 3

A company utilizing a flexible pricing approach should be aware of which potential negative consequence of this approach?

A) Increased sales
B) Stockouts/lost sales
C) Stable demand
D) Reduced forecast accuracy

Answer 3

B

Question 4

The department within a firm that oversees procurement is likely which of the following?

A) Supply management
B) Operations
C) Distribution
D) Marketing

Question 5

Supply chain flexibility is ________ than/as in the past.

A) Less
B) Greater
C) About the same
D) It is impossible to know how supply chain flexibility has changed over time

Question 6

The textbook notes that a recent survey of firms indicated that approximately what fraction of firms were not able to accurately forecast their earnings or sales for the next quarter?

A) 1/10
B) 1/3
C) 2/3
D) 3/4

Question 7

All of the following may influence demand and should be considered when developing a forecast except?

A) Economic conditions
B) New competition
C) Supplier quality
D) Emerging markets

Question 8

Forecasts will __________ have some error between the forecasted values and the actual values.

A) Not likely
B) Likely
C) Neither not likely nor likely
D) Forecasts will be perfect predictions of the future

Question 9

Over-forecasting is likely to lead to which of the following?

A) Product in short supply
B) Reduced inventory carrying costs
C) Excessive hiring
D) Personnel work hours reduced

Question 10

Which department provides projections for sales that are used as input to the forecasting process?

A) Field sales
B) Distribution
C) Operations
D) Supply management

Question 11

New product introductions, promotions, and pricing which impact demand forecasts are the responsibility of what department within a firm?

A) Operations
B) Distribution
C) Marketing
D) Supply management

Question 12

Capacity modification in response to fluctuations in demand can result in the following negative consequences except?

A) Reduced budget available for product transportation
B) Loss of sales as workers are trained
C) Negatively impacted firm reputation from temporary employees
D) Reduced product quality

Question 13

Holding substantial amounts of finished goods for delivery any time that a customer demand is experienced can result in which negative consequence?

A) Lower product quality
B) More difficult marketing
C) High carrying cost
D) Stockouts

Question 14

All of the following are potential benefits of better forecasts except?

A) Higher inventory levels
B) Reduced stockouts
C) Smoother production plans
D) Reduced costs

Question 15

Poor forecasting and production planning can negatively impact all of the following except?

A) Customer relationships
B) Product reliability
C) Sales
D) Profitability

Question 16

All of the following are approaches that are typically associated with demand management except?

A) Discounting prices to increase demand during slow demand periods
B) Reservation systems
C) Having customers form waiting lines (queues)
D) Providing next-day delivery options

Question 17

Which department within a firm uses demand forecasts to make capacity decisions (adding shifts, adding overtime, or purchasing new equipment)?

A) Operations
B) Distribution
C) Marketing
D) Supply management

Question 18

The process that balances customer requirements with supply chain capabilities is referred to as?

A) Supply chain management
B) Demand management
C) Supplier management
D) Production management

Question 19

Modern customer demands include the following "rights" except?

A) Right products
B) Right quantities
C) Right price
D) Customer demands include all of the "rights" listed (products, quantities, and price)

Question 20

Which of the following most accurately describes the concept of forecasting?

A) Estimate past demand
B) Summarize past sales
C) Estimate future demand
D) Summarize future pricing

Question 21

A bakery has experienced a slow and steady increase in demand for its products. The bakery is most likely experiencing which time series demand component?

A) Trend
B) Seasonality
C) Cyclical
D) Random variation

Question 22

Sales of ski equipment would likely be representative of which type of demand pattern?

A) Trend
B) Seasonality
C) Cyclical
D) Random variation

Question 23

Quantitative forecasting techniques that are based on assuming that the future can be predicted by the past are referred to as?

A) Associative forecasts
B) Time series forecasts
C) Qualitative forecasts
D) Delphi method

Question 24

Relying on field sales personnel to provide estimates of customer needs is referred to as which type of qualitative forecasting technique?

A) Consumer surveys
B) Delphi method
C) Jury of executive opinion
D) Sale force estimates

Question 25

Trend variation in a time series would most likely be characterized as?

A) Rapidly decreasing demand
B) Gradually increasing demand
C) Gradually increasing or decreasing demand
D) Demand pattern influenced by seasonal factors

Question 26

The jury of executive opinion approach is beneficial because of?

A) The dominating views of one of the executives
B) The collective knowledge of the executives
C) The reliance on field sales personnel
D) The use of external auditors

Question 27

When data available to a firm is too old to be useful, what type of forecasting technique should the firm consider?

A) Quantitative
B) Qualitative
C) Qualified
D) Quantified

Question 28

The use of focus groups to estimate a demand forecast is referred to as which type of qualitative forecasting technique?

A) Consumer surveys
B) Delphi method
C) Jury of executive opinion
D) Sale force estimates

Question 29

A firm makes what type of plans to accommodate unforeseen changes and forecast errors?

A) Continual
B) Contingency
C) Conclusive
D) Contextual

Question 30

Why might field sales personnel be able to develop a good forecast for demand?

A) They are motivated by bonuses
B) They are distanced from the customers and markets
C) They are close to a firm's suppliers
D) They are close to the customers and markets

Question 31

Apple's forecasts for the first iPad tablets were likely which type of forecast?

A) Quantitative
B) Qualitative
C) Qualified
D) Quantified

Question 32

A qualitative forecasting technique that relies on group convergence of forecasts is referred to as?

A) Consumer surveys
B) Delphi method
C) Jury of executive opinion
D) Sale force estimates

Question 33

All of the following are typical components of a time series except?

A) Trend
B) Seasonality
C) Clustered
D) Random variation

Question 34

Economic fluctuations (recessions or expansions) are examples of which time series demand component?

A) Trend
B) Seasonality
C) Cyclical
D) Random variation

Question 35

The manager of a luxury car rental company has noticed that demand for rentals is highly dependent on the state of the national economy. When the economy is performing well, she experiences lots of demand. However, when the economy is poor, she experiences very little demand. This demand pattern is likely an example of?

A) Trend
B) Seasonality
C) Cyclical
D) Random variation

Question 36

Using senior executives to develop a forecast is referred to as?

A) Consumer surveys
B) Delphi method
C) Jury of executive opinion
D) Sale force estimates

Question 37

Demand patterns that occur every several years and are influenced by macroeconomic and political factors are referred to as?

A) Trend
B) Seasonality
C) Cyclical
D) Random variation

Question 38

For long-term forecasts, it is recommended that which type of forecasts be used?

A) Quantitative
B) Associative
C) Qualitative
D) Forecasts cannot be developed for the long term

Question 39

The Delphi method is particularly useful because it can avoid what problem?

A) Group think
B) The voice of the customer
C) Wisdom of crowds
D) The Peter principle

Question 40

A firm launching a new product for which historical data does not exist would likely use which type of forecasting technique?

A) Quantitative
B) Qualitative
C) Qualified
D) Quantified

Question 41

Joe's Donut Hole sold 1,500 donuts in January, 1,600 in February, and 1,550 in March. What is the two period simple moving average forecast for April?

A) The two period simple moving average cannot be determined from the information given
B) 1,550
C) 1,600
D) 1,575

Question 42

Joe's Donut Hole sold 1,500 donuts in January, 1,600 in February, and 1,550 in March. What is the three period simple moving average forecast for April?

A) The three period simple moving average cannot be determined from the information given
B) 1,550
C) 1,600
D) 1,575

Question 43

Joe's Donut Hole sold 1,500 donuts in January, 1,600 in February, and 1,550 in March. What is the four period simple moving average forecast for April?

A) The four period simple moving average cannot be determined from the information given
B) 1,550
C) 1,600
D) 1,575

Question 44

The smoothing constant for exponential smoothing must be?

A) Negative
B) Positive
C) Between 0 and 1
D) Greater than 1

Question 45

Exponential smoothing relies on a weighted difference between the current period's _________ and ________.

A) Actual data and the previous period's actual data
B) Actual data and the current period's forecast
C) Actual data and the previous period's forecast
D) Actual data and the next period's actual data

Question 46

Unexpected events may lead to demand that is referred to as?

A) Trend
B) Seasonality
C) Cyclical
D) Random variation

Question 47

A salesperson has been asked to forecast her sales for the next month. To do so, she decides to average her sales from the past three months. This forecasting technique is referred to as?

A) Simple moving average
B) Weighted moving average
C) Exponential smoothing
D) Linear trend forecast

Question 48

A forecasting technique that uses an average of previous observations, with each observation being weighted, is which technique?

A) Simple moving average
B) Linear trend forecast
C) Exponential smoothing
D) Weighted moving average

Question 49

A forecasting method used when there is a single independent variable (time) and a dependent variable (often demand) and the two variables are linearly related is?

A) Linear trend forecast
B) Simple linear regression forecast
C) Multiple regression forecast
D) Exponential smoothing forecast

Question 50

A model when there are several independent variables that are linearly related to demand is?

A) Linear trend forecast
B) Simple linear regression forecast
C) Multiple regression forecast
D) Exponential smoothing forecast

Question 51

The simple moving average forecasting technique tends to work well when?

A) Demand rapidly increases then decreases
B) Demand is stable over time
C) Demand is highly variable
D) Demand rapidly decreases then increases

Question 52

Using the average of recent historical demand to generate a forecast is referred to as what technique?

A) Simple moving average
B) Weighted moving average
C) Exponential smoothing
D) Linear trend forecast

Question 53

A retailer experiencing unexplained variations in sales is likely experiencing?

A) Trend
B) Seasonality
C) Cyclical
D) Random variation

Question 54

In the weighted moving average forecast, weights are typically?

A) Descending as data is older
B) Ascending as data is older
C) The same for each period
D) Added to each forecast

Question 55

A causal model that predicts demand when the independent variable and the dependent variable are linearly related is?

A) Linear trend forecast
B) Simple linear regression forecast
C) Multiple regression forecast
D) Exponential smoothing forecast

Question 56

The weighted moving average forecast tends to?

A) Weight each period equally
B) Weight recent demand more lightly
C) Weight recent demand more heavily
D) Give each period a weight of zero

Question 57

The simple moving average is _______.

A) Able to respond to changes quickly
B) Difficult to calculate for small values of n
C) Not able to respond to changes quickly
D) Insensitive to stable demand

Question 58

In the weighted moving average forecast, weights must?

A) Be non-negative
B) Sum to 1
C) Be non-negative and sum to 1
D) Be neither non-negative nor sum to 1

Question 59

The simple moving average forecasting technique is?

A) Able to generate consistently perfect forecasts
B) Relatively easy to use
C) Relatively difficult to use
D) Rarely used due to its complexity

Question 60

The simple moving average forecast _________.

A) Weights each period equally
B) Weights recent demand more lightly
C) Weights recent demand more heavily
D) Gives each period a weight of zero

Question 61

Chairman Cat Products produces cat trees that are sold by several large pet stores. They sold 190, 210, and 208 cat trees in January, February, and March, respectively. Assuming that the first forecast value (for January) is set to 190, what is the exponential smoothing forecast for March? Assume a smoothing constant value of 0.4.

A) 190
B) 198
C) 202
D) Cannot be determined from the information given

Question 62

In Q1, a firm sold 23,000 units of a particular product. In Q2, the firm sold 25,000, and in Q3 22,850 units were sold. Assume weights of 0.5, 0.3, and 0.2 (descending for older data). What is the three period weighted moving average forecast for Q4?

A) 23,616
B) 23,525
C) 22,850
D) Forecast for Q4 cannot be determined from the information given

Question 63

As the exponential smoothing constant increases, the resulting forecast tends to?

A) Become less responsive to changes in the previous period's demand
B) Become more responsive to changes in the previous period's demand
C) Become neither more nor less responsive to changes in the previous period's demand
D) It is impossible to determine how the forecast will change due to changes in the smoothing constant

Question 64

The exponential smoothing forecasting technique tends to work well when?

A) Demand rapidly increases then decreases
B) Demand is stable over time
C) Demand is highly variable
D) Demand rapidly decreases then increases

Question 65

If a trend line is given as Demand = 65 + 21(Time) then what is the vertical axis intercept of the trend line?

A) 65
B) 21
C) 76
D) The slope cannot be determined from the information given

Question 66

With appropriate selection of weights, the weighted moving average forecasting technique is?

A) More responsive to changes in the data than the simple moving average
B) Less responsive to changes in the data than the simple moving average
C) Neither more nor less responsive to changes in the data than the simple moving average
D) Cannot be compared to the simple moving average

Question 67

If a trend line is given as Demand = 55 + 7.8(Time), then what is the predicted demand when Time equals 10?

A) -23
B) 62.8
C) 133
D) The predicted demand cannot be determined from the information given

Question 68

Chairman Cat Products produces cat trees that are sold by several large pet stores. They sold 190, 210, and 208 cat trees in January, February, and March, respectively. Assuming that the first forecast value (for January) is set to 190, what is the exponential smoothing forecast for May? Assume a smoothing constant value of 0.4.

A) 190
B) 198
C) 202
D) Cannot be determined from the information given

Question 69

If a trend line is given as Demand = 55 + 7.8(Time) then what is the predicted demand when Time equals 0?

A) 55
B) 62.8
C) 133
D) The predicted demand cannot be determined from the information given

Question 70

In a simple linear regression forecast, it is assumed that changes in _________ predict changes in __________.

A) Demand, the causal variable
B) The slope, the causal variable
C) The intercept, the slope
D) The causal variable, demand

Question 71

The exponential smoothing forecasting method requires?

A) More data than the weighted moving average technique
B) Less data than the weighted moving average technique
C) The same amount of data as the weighted moving average technique
D) No data

Question 72

If a trend line is given as Demand = 135 - 14(Time) then what is the slope of the trend line?

A) 121
B) 135
C) -14
D) The slope cannot be determined from the information given

Question 73

Chairman Cat Products produces cat trees that are sold by several large pet stores. They sold 190, 210, and 208 cat trees in January, February, and March, respectively. Assuming that the first forecast value (for January) is set to 190, what is the exponential smoothing forecast for March? Assume a smoothing constant value of 0.4.

A) 190
B) 198
C) 202
D) Cannot be determined from the information given

Question 74

In a linear trend forecast, a represents __________ while b represents __________.

A) Slope of the regression line, vertical axis intercept of the line
B) The forecast value, the demand value
C) Vertical axis of the line, slope of the regression line
D) Slope of the regression line, horizontal axis intercept of the line

Question 75

Chairman Cat Products produces cat trees that are sold by several large pet stores. They sold 190, 210, and 208 cat trees in January, February, and March, respectively. Assuming that the first forecast value (for January) is set to 190, what is the exponential smoothing forecast for April? Assume a smoothing constant value of 0.4.

A) 190
B) 198
C) 202
D) Cannot be determined from the information given

Question 76

When linear trend forecasts are developed, demand would typically be?

A) The independent variable
B) The dependent variable
C) The intrinsic variable
D) The developed variable

Question 77

Chairman Cat Products produces cat trees that are sold by several large pet stores. They sold 190, 210, and 208 cat trees in January, February, and March, respectively. Assuming that the first forecast value (for January) is set to 190, what is the exponential smoothing forecast for February? Assume a smoothing constant value of 0.7.

A) 190
B) 204
C) 206.8
D) Cannot be determined from the information given

Question 78

In Q1, a firm sold 23,000 units of a particular product. In Q2, the firm sold 25,000 and in Q3 22,850 units were sold. Assume weights of 0.7 and 0.3 (descending for older data). What is the two period weighted moving average forecast for Q4?

A) 23,616
B) 23,525
C) 23,495
D) Forecast for Q4 cannot be determined from the information given

Question 79

The exponential smoothing technique is?

A) Rarely used due to its complexity
B) Rarely used due to its inaccuracy
C) Widely used due to its simplicity
D) Widely used due to its ability to generate perfect forecasts

Question 80

The initial period's forecast for the exponential smoothing technique can be estimated by?

A) Randomly selecting a forecast value
B) Selecting a forecast value of zero
C) Selecting a forecast value using linear regression
D) Setting the first period's forecast equal to the first period's demand