Deck 14: Forecasting Demand for Services

Question 1

Econometric models are basically regression models that involve a system of equations.

Answer 1

True

Question 2

Exponential smoothing prevents overreaction to extremes in the actual observed values.

Answer 2

True

Question 3

Fast-food restaurants use a causal model to forecast daily demand for menu items.

Answer 3

False

Question 4

The key feature of the historical analogy method is that it assumes some future event is related to the occurrence of an earlier event.

Question 5

Both measures of forecast accuracy, MAD and MSE, give equal weight to all forecasting errors.

Question 6

Seasonal adjustment involves the deseasonalization of data in a given cycle after smoothing.

Question 7

Subjective models are used to assess the future impact of changing demographics.

Question 8

Most forecasting models assume that the underlying pattern of behavior of their data will remain the same. The only component of error is attributable to random fluctuations that are not under the control of anyone.

Question 9

Both trend and seasonal adjustments can augment a single exponential-smoothing model.

Question 10

The forecast horizon for a cross-impact analysis method is medium-term.

Question 11

Because of the nontangible nature of service, forecasting does not play as important role in service operations as in manufacturing operations.

Question 12

The trade-off to be made with respect to accuracy is between the costs of inaccurate forecasts and the costs of increasing the accuracy of forecasts.

Question 13

In the Delphi method, the opinions of experts are collected, then the analyst resolves differences of opinion to arrive at a consensus.

Question 14

Historical analogy involves comparative analysis of the introduction and growth patterns of new items with similar previously introduced items.

Question 15

The main advantage that simple moving-average models have over exponentially-smoothed models is that they can be made to give any desired weight to specific periods in the past.

Question 16

The selection of candidate independent variables for a regression model to forecast motel occupancy requires input from knowledgeable marketing personnel.

Question 17

The cost of formulating, developing, and testing regression models, plus the expertise required to interpret results, often dictates the use of this model only for medium-term or long-term forecasting.

Question 18

Costs for preparing time series forecasts generally are lower than for other models.

Question 19

One reason exponential smoothing is so popular is the ease with which it can be made to accommodate trend and seasonality in its forecasts.

Question 20

The greatest advantage of subjective techniques like Delphi method and cross-impact analysis, is that the methods are fairly standardized and do not require much expertise in actual use.

Question 21

Long-term forecasts do not deal with predictions for ________.

A) new services
B) changes in mix of services
C) overtime or temporary labor requirements
D) process technology

Question 22

Regression models require all of the following, except ________.

A) numerical data
B) subjective data
C) independent variables
D) dependent variable

Question 23

________ is the smoothing constant for the trend adjustment in an exponential smoothing forecast.

A) Alpha
B) Beta
C) Gamma
D) Delta

Question 24

The accuracy of a time-series model is dependent upon ________.

A) the nature of past data
B) the weight given to past data
C) the treatment of seasonality and trend
D) the assumption that the future is a projection of the past

Question 25

Survey results are used in ________.

A) regression
B) cross-impact analysis
C) econometric models
D) Delphi method

Question 26

The usual range of the smoothing constant for a simple exponential smoothing forecast is ________.

A) 0.1 - 0.5
B) 0.3 - 0.7
C) 0.5 - 0.7
D) 0.5 - 1.0

Question 27

The forecast horizon for regression methods is ________.

A) short term
B) medium term
C) long term
D) medium to long term

Question 28

All of the following are forecasting models, except ________ model.

A) subjective
B) objective
C) causal
D) time series

Question 29

The Delphi method is best used when forecasting ________.

A) customer demand
B) technological change
C) correlations between events
D) future economic conditions

Question 30

Characteristics of forecasting models include all of the following, except ________.

A) data required
B) economic conditions
C) relative cost
D) forecast horizon

Question 31

Which of the following is not an advantage of the simple exponential smoothing model over the N-period moving average model?

A) Old data are never dropped.
B) Older data are given progressively less weight.
C) Calculation is simple.
D) None of these answers are correct.

Question 32

All of the following are characteristics of the moving-average model, except ________.

A) very low relative cost
B) short-term forecast horizon
C) uses all past data in forecast
D) used for demand forecasting

Question 33

In regression models, the variable of interest (being forecast) is called ________.

A) a defining variable
B) an independent variable
C) a basic variable
D) a dependent variable

Question 34

Which of the following methods is an example of a causal model?

A) Delphi method.
B) Moving average.
C) Cross-impact analysis.
D) Regression.

Question 35

________ is the best for forecasting demand.

A) Exponential smoothing
B) Historical analogy
C) Delphi method
D) Econometrics

Question 36

Which of the following forecasting models is required for the forecast of the demand for hotel services?

A) Subjective and causal.
B) Subjective and time series.
C) Time series and causal.
D) Only time series.

Question 37

The ________ forecasting method requires the most computer power.

A) econometric
B) cross-impact
C) regression
D) historical analogy

Question 38

Exponential smoothing uses a feedback control mechanism because ________.

A) α is less than 1
B) calculations are based on modifying the previous smooth value
C) the calculation contains the forecast error
D) the weights given to past data are exponentially distributed

Question 39

In forecasting, the term 'cycle' refers to repetition of data ________.

A) once a year, if seasonal
B) once in a period
C) within a week
D) during a day

Question 40

Subjective forecasting models are best characterized by ________.

A) the use of experts
B) the use of opinion as a basis for a forecast
C) the absence of data manipulation
D) the use of simultaneous equations