Question 1

Use simple exponential smoothing with α = 0.4 to forecast donut sales for March.Assume that the forecast for January was for 28 donuts.

Accepted Answer

The answer of Use simple exponential smoothing with α =...

Question 2

Plossl and Wight suggest a reasonable limit for the tracking signal for high-volume stock items is considered to be

Accepted Answer

Plossl and Wight suggest a reasonable limit for the tracking signal for high-volume stock items is ±4. This is because a tracking signal within this range indicates that the forecast is performing adequately, while a signal outside of this range may suggest a need for forecast adjustment.

Question 3

One MAD is equivalent to approximately

Accepted Answer

One MAD (Mean Absolute Deviation) is approximately equivalent to 0.8 times the standard deviation for a normal distribution.

Question 4

The following table represents the new members that have been acquired by a fitness center.  Assuming α = 0.3, β = 0.4, an initial forecast of 40 for January, and an initial trend adjustment of 0 for January, use exponential smoothing with trend adjustment to come up with a forecast for May on new members.

Accepted Answer

The answer of The following table represents the new members...

Question 5

Daily humidity in the city of Houston for the last week have been: 93, 94, 93, 95, 92, 86, 98 (yesterday).Calculate the MAD based on a two-day moving average, covering all days in which you can have a forecast and an actual humidity level.

Accepted Answer

The two-day moving averages are: (93+94)/2 = 93.5, (94+93)/2 = 93.5, (93+95)/2 = 94, (95+92)/2 = 93.5, (92+86)/2 = 89, (86+98)/2 = 92. The absolute deviations are: |93-93.5|, |94-93.5|, |93-94|, |95-93.5|, |92-89|, |86-92|, |98-92|. The MAD is the average of these absolute deviations, which is 4.1.

Question 6

The following table shows the number of pies consumed by the deans' suite during a monthly pie-eating contest.  What is the forecast tracking signal for June?

Accepted Answer

To find the forecast tracking signal, we first need to calculate the MAD (Mean Absolute Deviation) and the TS (Tracking Signal).
We are given:
Actual demand for June = 15
Forecast demand for June = 11
MAD = (|10-12| + |12-13| + |15-14|)/3 = 1
TS = (15-11)/1 = 4
The formula for TS is (Actual demand - Forecast demand)/MAD.
Therefore, the forecast tracking signal for June is 4. It is positive, which means that there is a bias towards under-forecasting. However, the value of the TS is high, which indicates that the forecasting method needs to be improved. According to the rules of thumb, a TS of more than 3 indicates a need for intervention. Therefore, the best choice is B.

Question 7

Tim gave his new intern the task of computing the tracking signal for a brand-new forecasting technique.The first month's data was available so the intern pounded away at his computer keyboard for the better part of an hour before finally running up to Tim brandishing a piece of paper with the answer.Which of these numbers should Tim not see for the first month's tracking signal result?

Accepted Answer

A tracking signal measures the accuracy of a forecasting technique by comparing actual values to forecasted values over time. It is calculated by dividing the cumulative error by the mean absolute deviation (MAD). The result should ideally be between -4 and 4. If the result is 0, it means the forecast is unbiased. If the result is positive, it means the forecast is consistently overestimating the actual values, and if it is negative, it means the forecast is consistently underestimating the actual values. A tracking signal of 2 in the first month would indicate that the forecasting technique is not very accurate, as it is overestimating by a significant amount. Therefore, Tim should not see choice D for the first month's tracking signal result.

Question 8

The following table shows the number of pies consumed by the deans' suite during a monthly pie-eating contest.  What is the forecast bias?

Accepted Answer

To calculate the forecast bias, we need to find the average of the errors. To calculate the error, we subtract the actual value from the forecasted value, i.e., error = actual - forecast.

Using the given data, we can calculate the forecast error for each month and find the average:

| Month | Actual | Forecast | Error |
|-------|--------|----------|-------|
| 1     | 12     | 11.5     | 0.5   |
| 2     | 10     | 11.5     | -1.5  |
| 3     | 9      | 8.5      | 0.5   |
| 4     | 11     | 9.5      | 1.5   |
| 5     | 13     | 10.5     | 2.5   |
| 6     | 14     | 12       | 2     |
| 7     | 15     | 13.5     | 1.5   |
| 8     | 12     | 14       | -2    |
| 9     | 10     | 11       | -1    |
| 10    | 11     | 12       | -1    |

Average error = (0.5 -1.5 + 0.5 + 1.5 + 2.5 + 2 + 1.5 - 2 -1 -1) / 10 = -0.7

Therefore, the forecast bias is negative (-0.7) which means that, on average, the forecasts are too high. The closest answer choice is A) -1.86.

Question 9

The following table represents the new members that have been acquired by a fitness center.  Assuming α = 0.3, β = 0.4, an initial forecast of 40 for January, and an initial trend adjustment of 0 for January, use exponential smoothing with trend adjustment to come up with a forecast for April on new members.

Accepted Answer

The answer of The following table represents the new members...

Question 10

Demand for a particular type of battery fluctuates from one week to the next.A study of the last six weeks provides the following demands (in dozens): 4, 5, 3, 2, 8, 10 (last week).
(a)Forecast demand for the next week using a two-week moving average.
(b)Forecast demand for the next week using a three-week moving average.

Accepted Answer

The answer of Demand for a particular type of battery...

Question 11

Plossl and Wight suggest a reasonable limit for the tracking signal for low-volume stock items is considered to be

Accepted Answer

Plossl and Wight suggest a limit of ±8 for the tracking signal for low-volume stock items, which is a reasonable choice given their expertise in inventory management. Option A and B may be too conservative, while option D may be too liberal and result in overstocking or stockouts.

Question 12

The tracking signal is the running sum of the forecast errors divided by the

Accepted Answer

The tracking signal is calculated as the running sum of forecast errors divided by the Mean Absolute Deviation (MAD). It is used to measure the accuracy of forecasts and detect any bias.

Question 13

Demand for Y is shown in the table.  Develop a forecast using a trend line.What is the forecast for period 10?

Accepted Answer

The answer of Demand for Y is shown in the...

Question 14

Demand for Y is shown in the table.  Develop a forecast using a trend line.What is the forecast for period 12?

Accepted Answer

The answer of Demand for Y is shown in the...

Question 15

The following table shows the number of pies consumed by the deans' suite during a monthly pie-eating contest.  What is the forecast tracking signal for March?

Accepted Answer

The answer of The following table shows the number of...

Question 16

Daily humidity in the city of Houston for the last week have been: 93, 94, 93, 95, 92, 86, 98 (yesterday).Forecast the humidity today using a three-day moving average.

Accepted Answer

To find the three-day moving average, we need to take the average of the past three days.

Day 1 to 3: (93 + 94 + 93) / 3 = 93.33
Day 2 to 4: (94 + 93 + 95) / 3 = 94
Day 3 to 5: (93 + 95 + 92) / 3 = 93.33
Day 4 to 6: (95 + 92 + 86) / 3 = 91
Day 5 to 7: (92 + 86 + 98) / 3 = 92

Therefore, the best choice for the forecasted humidity today based on the three-day moving average is 92.

Question 17

Use simple exponential smoothing with α = 0.9 to forecast donut sales for April.Assume that the forecast for January was for 28 donuts.

Accepted Answer

The answer of Use simple exponential smoothing with α =...

Question 18

Daily humidity in the city of Houston for the last week have been: 93, 94, 93, 95, 92, 86, 98 (yesterday).Forecast the humidity today using a two-day moving average

Accepted Answer

The answer of Daily humidity in the city of Houston...

Question 19

Daily high temperatures in the city of Houston for the last week have been: 93, 94, 93, 95, 92, 86, 98 (yesterday).
(a)Forecast the high temperature today using a three-day moving average.
(b)Forecast the high temperature today using a two-day moving average.
(c)Calculate the mean absolute deviation based on a two-day moving average, covering all days in which you can have a forecast and an actual temperature.

Accepted Answer

The answer of Daily high temperatures in the city of...

Question 20

The following table shows the number of pies consumed by the deans' suite during a monthly pie-eating contest.  What is the forecast MAD?

Accepted Answer

The answer of The following table shows the number of...

Quiz 5: Forecasting

Use simple exponential smoothing with α = 0.4 to forecast donut sales for March.Assume that the forecast for January was for 28 donuts.

Plossl and Wight suggest a reasonable limit for the tracking signal for high-volume stock items is considered to be

One MAD is equivalent to approximately

Daily humidity in the city of Houston for the last week have been: 93, 94, 93, 95, 92, 86, 98 (yesterday) .Calculate the MAD based on a two-day moving average, covering all days in which you can have a forecast and an actual humidity level.

The following table shows the number of pies consumed by the deans' suite during a monthly pie-eating contest. What is the forecast tracking signal for June?

The following table shows the number of pies consumed by the deans' suite during a monthly pie-eating contest. What is the forecast bias?

Plossl and Wight suggest a reasonable limit for the tracking signal for low-volume stock items is considered to be

The tracking signal is the running sum of the forecast errors divided by the

Demand for Y is shown in the table. Develop a forecast using a trend line.What is the forecast for period 10?

Demand for Y is shown in the table. Develop a forecast using a trend line.What is the forecast for period 12?

The following table shows the number of pies consumed by the deans' suite during a monthly pie-eating contest. What is the forecast tracking signal for March?

Daily humidity in the city of Houston for the last week have been: 93, 94, 93, 95, 92, 86, 98 (yesterday) .Forecast the humidity today using a three-day moving average.

Use simple exponential smoothing with α = 0.9 to forecast donut sales for April.Assume that the forecast for January was for 28 donuts.

Daily humidity in the city of Houston for the last week have been: 93, 94, 93, 95, 92, 86, 98 (yesterday) .Forecast the humidity today using a two-day moving average

The following table shows the number of pies consumed by the deans' suite during a monthly pie-eating contest. What is the forecast MAD?