Question 1

Using the data from Question 11,calculate the forecast for period 7 using a four-period moving average:

Accepted Answer

48 + 60 + 53 + 60 = 221. 221/4 = 55.25.

Question 2

If a sales representative tells his or her manager,"I hope to sell 20% more than last year," this should be considered

Accepted Answer

Forecasting deals with what we think will happen. A hope to sell more is best described as a goal.

Question 3

A small company that manufactures rubber boots is selecting a method to forecast demand for the next 10 years.The company recently expanded its facilities,doubling its capacity.Which of the following forecasting methods would be preferred?

Accepted Answer

10 years is a long-range application, so qualitative methods will be most applicable.

Question 4

A regression model is an example of which type of forecasting method?

Accepted Answer

One of the best-known causal methods is regression.

Question 5

What is the exponentially smoothed forecast for week 2? (Use F₁ = 25 and alpha = 0.2.)

Accepted Answer

F2 = F1 + alpha(D1 - F1) = 25 + 0.2(25 - 20) = 24.

Question 6

The difference between actual demand and the forecast is

Accepted Answer

The difference between actual demand and the forecast is known as the forecast error. Therefore, option A is the correct choice. Option B refers to the average absolute difference between the actual demand and forecast, option C refers to the absolute value of the difference between actual demand and forecast, and option D refers to the average of the absolute deviations of forecast error.

Question 7

Which of the following is NOT one of the most important factors in selecting a forecasting method?

Accepted Answer

A, B, and C are important factors

Question 8

Given the following information for period 15,what will be the smoothed mean absolute deviation for period 16? Demand = 120 Forecast = 180 MAD₁₅ = 50 Alpha = 0.3

Accepted Answer

MADt = alpha(absolute value Dt - Ft) + (1 - alpha)MADt-1 = 0.3(60) + 0.7(50) = 53.

Question 9

When should qualitative methods NOT be used?

Accepted Answer

Time series methods, not qualitative methods, are best suited to repetitive short-range forecasting.

Question 10

A qualitative forecast would most likely be used for

Accepted Answer

Qualitative methods typically are used for medium and long-range forecasting for decisions such as process design.

Question 11

If one time series model is used for forecasting a low-demand item and another time series model is used for forecasting a high-demand item,which measure of forecast accuracy provides a valid comparison of the errors from these two time series?

Accepted Answer

The purpose of MAPE is to normalize the error and allow comparison of different time series data.

Question 12

Forecast error is used for all of the following EXCEPT

Accepted Answer

A, B, and D are given purposes of forecasting error

Question 13

A method of forecasting that best describes the flows from one sector of the economy to another is called

Accepted Answer

This is a description of an input-output model

Question 14

Which of the following is NOT a measure of forecast accuracy?

Accepted Answer

A. B. and C are measures of forecast accuracy

Question 15

The Grand Bakery produces 60 special sourdough rolls every day.Any rolls that are not sold each day are given to the employees.The bakery collected sales data from the past week: What is the value of F₆ if the bakery uses a 3-day weighted moving average with W₁ = 0.6,W₂ = 0.2,and W₃ = 0.2?

Accepted Answer

0.6(53) + 0.2(60) + 0.2(48) = 53.4.

Question 16

Using exponential smoothing,if we want forecasts to be very responsive to recent demand,the value of alpha should be

Accepted Answer

Increasing the alpha value increases the responsiveness of the forecast to the most recent error.

Question 17

The forecast was 70 units for the current period while actual demand was 76.The forecast for the next period is 75.8.What is alpha if a simple exponential smoothing forecast method is being used?

Accepted Answer

Ft+1 = Ft + alpha(Dt - Ft), therefore 75.8 = alpha(76 - 70). Solving for alpha = 0.967 (5.8/6.0 = 0.967).

Question 18

What is the exponentially smoothed forecast for week 6? (Use F₅ = 33 and alpha = 0.0.)

Accepted Answer

F2 = F1 + alpha(D1 - F1) = 33 + 0.0(35 - 40) = 33.

Question 19

Given the following weekly demand figures,  using a three-week moving average,what is your forecast for week 6?

Accepted Answer

30 (week 3) + 20 (week 4) + 40 (week 5) = 90. 90/3 = 30.

Question 20

Which phrase most closely describes the Delphi forecasting technique?

Accepted Answer

All are true

Quiz 10: Forecasting