Question 1

The greater the randomness in the model,the greater the number of periods should be used in a moving average forecast.

Accepted Answer

The more random the data is, the more periods should be used in a moving average forecast. This is because random fluctuations can be smoothed out with a longer average. A shorter average may not capture all the fluctuations and may provide inaccurate predictions.

Question 2

The Delphi method,panel consensus forecasting,and market surveys are all qualitative forecasting methods,but only market surveys do NOT use experts.

Accepted Answer

True

Question 3

Exponential smoothing with an alpha of one will yield identical results to a last period forecast.

Accepted Answer

Exponential smoothing is a forecasting technique that uses a smoothing factor, alpha, to adjust the weight given to past observations when making a forecast. When alpha is set to one, only the most recent observation is used to make the forecast, which is equivalent to using a last period forecast. Therefore, exponential smoothing with an alpha of one will yield identical results to a last period forecast.

Question 4

The independent variable is the quantity the forecaster is interested in estimating with a linear regression model.

Accepted Answer

The independent variable is the variable that is manipulated or controlled by the experimenter, and is also known as the predictor variable in linear regression. The dependent variable is the variable that is being measured or observed and is known as the response variable in linear regression. Therefore, the dependent variable is the quantity the forecaster is interested in estimating with a linear regression model, not the independent variable.

Question 5

When there is a significant upward or downward trend in the data,the two best forecasting models are adjusted exponential smoothing and linear regression.

Accepted Answer

Adjusted exponential smoothing and linear regression are both useful models for forecasting data with a significant trend. Adjusted exponential smoothing is particularly good for data that has a strong seasonal component, while linear regression is good for identifying a linear trend in the data. Both models can be used to make forecasts and make informed decisions based on trends in the data.

Question 6

The slope of the regression equation is positive if the r-squared value is greater than 0.0.

Accepted Answer

The r-squared value measures the proportion of the variance in the dependent variable that is predictable from the independent variable, and it does not indicate the direction of the relationship (positive or negative slope) between the variables.

Question 7

A seasonal index less than 1.0 means that the model is overforecasted.

Accepted Answer

The answer of A seasonal index less than 1.0 means...

Question 8

Over the long run,fluctuations in demand due to seasonality are greater than those due to randomness.

Accepted Answer

Seasonality refers to regular and predictable patterns of demand fluctuations that occur due to factors such as holidays, weather, and other seasonal variations. In contrast, random fluctuations in demand are unpredictable and occur due to factors such as changes in consumer behavior, economic conditions, or competitive environments. Research has shown that over time, seasonality tends to have a greater impact on demand fluctuations than randomness. This is because seasonal patterns are more reliable and easier to identify, and companies can plan accordingly by adjusting inventory levels, production schedules, pricing strategies, and marketing campaigns.

Question 9

A long-term movement up or down in a time series is called:
A) seasonality.
B) trend.
C) randomness.
D) cycle.

Accepted Answer

A trend refers to a long-term movement up or down in a time series. Seasonality refers to regular, predictable fluctuations in a time series, randomness refers to unpredictable fluctuations, and cycles refer to repetitive patterns that are not necessarily long-term trends.

Question 10

Describe the mechanics of three qualitative forecasting techniques and compare their strengths and weaknesses.

Accepted Answer

The answer of Describe the mechanics of three qualitative forecasting...

Question 11

A seasonal pattern in time series data is evident when the level of the variable of interest moves erratically up or down from one period to the next.

Accepted Answer

A seasonal pattern in time series data is characterized by regular, predictable changes that recur every calendar year, not erratic movements from one period to the next.

Question 12

Fed up with her working conditions at the call center,Lisa decides to invest in a state-of-the-art sewing machine and produce limited quantities of her own clothing designs.After a few months of operation,she decides to apply some of the forecasting techniques she mastered in school.Which of these statements about her forecasts is correct?
A) Her forecasts will probably be 100% accurate.
B) Her demand forecasts for a year from now will probably be more accurate than her demand forecasts for three months from now.
C) Her demand forecasts for each style of skirt will be more accurate than her demand forecasts for all skirts.
D) The best way for her to determine the amount of fabric she needs is to forecast it based on her customer orders for each type of skirt.

Accepted Answer

Forecasting based on specific customer orders for each type of skirt allows for a more tailored and accurate estimation of fabric needs, accommodating variations in demand among different styles.

Question 13

A qualitative forecasting technique in which individuals familiar with specific market segments estimate the demand within these sectors that are then summed to get an overall forecast is called a:
A) market survey.
B) life cycle analogy.
C) panel consensus forecasting.
D) build-up forecast.

Accepted Answer

The build-up forecast method involves individuals familiar with specific market segments estimating the demand within these sectors, which are then summed to get an overall forecast. This approach is particularly useful for understanding and predicting demand in a detailed and segmented manner.

Question 14

A qualitative forecasting technique well-suited for demand forecasts of a new product or service is the:
A) Delphi method.
B) build-up forecast.
C) life cycle analogy method.
D) market survey.

Accepted Answer

The life cycle analogy method is suitable for new products as it uses the life cycle of similar products to forecast demand.

Question 15

What are the laws of forecasting and what are their implications for operations and supply chain managers?

Accepted Answer

The answer of What are the laws of forecasting and...

Question 16

Qualitative forecasts are used when there is plenty of relevant data.

Accepted Answer

Qualitative forecasts are subjective and rely on expert opinions and judgments rather than data. They are used when there is limited or unreliable data available.

Question 17

A video game publishing company needs to predict the total sales in the European market for the next year.This is an example of a(n):
A) firm-level demand forecast.
B) overall market demand forecast.
C) supply forecast.
D) price forecast.

Accepted Answer

The question is asking about predicting the total sales in the European market, which indicates an overall market demand forecast. A firm-level demand forecast would be specific to one particular company's sales, while a supply forecast would focus on predicting the quantity of goods that will be produced or available. A price forecast would involve predicting the prices of the game in the European market, which is not the focus of the question.

Question 18

The panel consensus forecasting approach requires that the forecasting team discuss their forecast as a team but the ________ requires that each member of the team develop a separate forecast initially.

Accepted Answer

The answer of The panel consensus forecasting approach requires that...

Question 19

Forecasts are almost always wrong.

Accepted Answer

Forecasts are based on assumptions and predictions that are subject to change. External factors beyond control can also impact the accuracy of a forecast. Therefore, it is rare for forecasts to be completely accurate.

Question 20

A firm's demand data from the last two quarter is displayed in the table.Use a three period moving average to forecast demand for July. 
A) 206
B) 217
C) 223
D) 226

Accepted Answer

The answer of A firm's demand data from the last...

Quiz 9: Forecasting