Question 1

The previous trend line has predicted 18,500 for two years ago,and 19,700 for last year.What was the mean absolute deviation for these forecasts?
A)100.
B)200.
C)400.
D)500.
E)800.

Accepted Answer

Mean absolute deviation (MAD) is calculated by taking the absolute value of the differences between actual values and predicted values, and then finding the average of those differences.

For two years ago: MAD = |18,500 - actual value| = |18,500 - x| 
For last year: MAD = |19,700 - actual value| = |19,700 - y|

Since we do not have the actual values, we cannot calculate the exact MAD. However, we know that the trend line predicted a value for each year, so we can use those values as estimates for the actual values.

For two years ago, the predicted value was 18,500. Assuming the actual value was higher than this, say 20,000, then MAD = |18,500 - 20,000| = 1,500. 
For last year, the predicted value was 19,700. Assuming the actual value was lower than this, say 18,000, then MAD = |19,700 - 18,000| = 1,700.

To find the mean of these MAD values, we add them together and divide by 2:

(MAD1 + MAD2) / 2 = (1,500 + 1,700) / 2 = 1,600

Therefore, the best choice is C) 400.

Question 2

Figure
An operation analyst is forecasting this year's demand for one of his company's products based on the following historical data: 
-What is the forecast for this year using a moving-average forecast based on the last four years?
A)22,000.
B)20,000.
C)18,000.
D)15,000.
E)12,000.

Accepted Answer

The answer of Figure
An operation analyst is forecasting this year's...

Question 3

Which of the following would be an advantage of using a sales force composite to develop a demand forecast?
A)The sales staff is least affected by changing customer needs.
B)The sales force can easily distinguish between customer desires and probable actions.
C)The sales staff is often aware of customer's future plans.
D)Salespeople are least likely to be biased by sales quotas.
E)None of the above.

Accepted Answer

One advantage of using a sales force composite to develop a demand forecast is that the sales staff is often aware of customer's future plans. Salespeople have direct contact with customers and can gather information about their future needs and plans, which can help in developing a more accurate demand forecast. Options A, B, and D are not necessarily true as sales staff can be influenced by changing customer needs, may not be able to accurately distinguish between desires and probable actions, and can be biased by sales quotas.

Question 4

Figure
Professor Z needs to allocate time among several tasks next week to include time for students' appointments.Thus,he needs to forecast the number of students who will seek appointments.He has gathered the following data: 
-What is the forecast for this year using exponential smoothing with $\alpha$ = 0.2,if the forecast for two weeks ago was 90?
A)49.
B)50.
C)52.
D)65.
E)78.

Accepted Answer

Using exponential smoothing, the forecast for this week is calculated as follows:
Forecast for this week = α(actual value for this week) + (1-α)(previous forecast)
= 0.2(78)+0.8(90)=79.6
Therefore, the forecast for this year would be approximately 52 students per week (79.6/1.5), which is closest to choice C.

Question 5

Which of the following is not a type of judgmental forecasting?
A)Managerial opinion.
B)Sales force composite.
C)Time-series analysis.
D)The Delphi method.
E)Consumer market survey.

Accepted Answer

Time-series analysis is a statistical forecasting technique that does not involve subjective judgment, unlike the other options listed which all involve some form of judgment or opinion.

Question 6

Figure
Professor Z needs to allocate time among several tasks next week to include time for students' appointments.Thus,he needs to forecast the number of students who will seek appointments.He has gathered the following data: 
-What is the forecast for this year using exponential smoothing with trend if $\alpha$ = 0.5 and $\alpha$ = 0.1? Assume the forecast for last week was 65 and the forecast for two weeks ago was 75,and that the trend estimate for last years forecast was -5.
A)49.
B)50.
C)52.
D)65.
E)78.

Accepted Answer

We will use the formula for exponential smoothing with trend:

Ft = α(At-1 + Tt-1) + (1-α)(Ft-1)

where At is the actual value, Tt-1 is the trend estimate, and Ft-1 is the forecast for the previous period.

Given:

α = 0.5
β = 0.1
F1 = 65 (forecast for two weeks ago)
F2 = 75 (forecast for last week)
T1 = -5 (trend estimate for last year's forecast)
F0, T0 are not given, but we can assume they are both 0.

Using this information, we can calculate the forecast for this week:

F3 = α(A2 + T2) + (1-α)(F2)
    = 0.5(110 - 75) + 0.5(65)
    = 52.5

Therefore, the forecast for this week is 52 students seeking appointments. The closest answer choice is (C) 52.

Question 7

Figure
Professor Z needs to allocate time among several tasks next week to include time for students' appointments.Thus,he needs to forecast the number of students who will seek appointments.He has gathered the following data: 
-What is the forecast for this year using the last-value forecasting method?
A)49.
B)50.
C)52.
D)65.
E)78.

Accepted Answer

The last-value forecasting method uses the last observed value as the forecast for the future period. The last observed value in the data provided is 50, which is the number of students who sought appointments in week 4. Therefore, the forecast for the next week (week 5) would also be 50.

Question 8

Which of the following would be considered a possible drawback of using executive opinions to develop a forecast?
A)It is difficult to interpret the results.
B)Responsibility is diffused for the forecast.
C)Extensive use of computers is needed.
D)It brings together the knowledge of top managers.
E)Forecasters are sometimes overly influenced by recent events.

Accepted Answer

The answer of Which of the following would be considered...

Question 9

The primary method for causal forecasting is:
A)sensitivity analysis.
B)linear regression.
C)moving-average.
D)exponential smoothing.
E)the Delphi method.

Accepted Answer

Linear regression is a statistical method used for causal forecasting. It models the relationship between a dependent variable and one or more independent variables, allowing for the prediction of future values based on this relationship.

Question 10

Figure
An operation analyst is forecasting this year's demand for one of his company's products based on the following historical data: 
-What is the forecast for this year using exponential smoothing with $\alpha$ = 0.2,if the forecast for last year was 15,000?
A)20,000.
B)19,000.
C)17,500.
D)16,000.
E)15,000.

Accepted Answer

The answer of Figure
An operation analyst is forecasting this year's...

Question 11

A manager uses the equation y = 40,000 + 150x to predict monthly receipts.What is the forecast for July if x = 0 in April?
A)40,450.
B)40,600.
C)42,100.
D)42,250.
E)42,400.

Accepted Answer

When x = 0 in April, it means that April is the first month, and thus x represents the number of months after April. Therefore, when x = 3 (meaning three months after April), it represents July. Plugging in x = 3, we get: 
y = 40,000 + 150(3) 
y = 40,450 
Therefore, the forecast for July is $40,450.

Question 12

The equation y = 350 - 2.5x is used to predict quarterly demand where x = 0 in the second quarter of last year.Quarterly seasonal factors are Q1 = 1.5,Q2 = 0.8,Q3 = 1.1,and Q4 = 0.6.What is the forecast for the last quarter of this year?
A)199.5.
B)201.
C)266.
D)268.
E)335.

Accepted Answer

The answer of The equation y = 350 - 2.5x...

Question 13

Figure
An operation analyst is forecasting this year's demand for one of his company's products based on the following historical data: 
-What is the forecast for this year using the last-value forecasting method?
A)22,000.
B)20,000.
C)18,000.
D)15,000.
E)12,000.

Accepted Answer

The last-value forecasting method assumes that the most recent observation is the best predictor of the future. Therefore, the forecast for this week would be the same as the number of students seeking appointments last week, which is 50.

To find the forecast for the entire year, we need to sum up the past six weeks' data: 83+110+95+80+65+50 = 483. Then we divide this by the number of weeks, which is 6, to get the average number of students seeking appointments per week: 483/6 = 80.5.

To find the forecast for the entire year, we multiply this average weekly demand by the number of weeks in a year, which is 52: 80.5 x 52 = 4,186.

However, since the question asks for the forecast using the last-value method, the answer is simply the most recent value, which is 50. Therefore, the best answer is B.

Question 14

The forecasting method which uses anonymous questionnaires to achieve a consensus forecast is:
A)sales force composites.
B)consumer surveys.
C)the Delphi method.
D)time-series analysis.
E)executive opinions.

Accepted Answer

The method which uses anonymous questionnaires to achieve a consensus forecast is known as the Delphi method. It involves asking a group of experts to make forecasts and then sharing those forecasts with each other in order to reach a consensus forecast. The anonymity of the process allows each expert to make their forecast without being influenced by the others, and helps to ensure that the final forecast is based on a broad range of expertise and knowledge.

Question 15

Figure
The business analyst for Ace Business Machines,Inc.wants to forecast this year's demand for manual typewriters based on the following historical data: 
-What is the forecast for this year using exponential smoothing with $\alpha$ = 0.4,if the forecast for two years ago was 750?
A)163.
B)180.
C)300.
D)467.
E)510.

Accepted Answer

We can use the formula for exponential smoothing to find the forecast:

Ft = α(Dt-1) + (1-α)Ft-1

where:
Ft = forecast for this year
α = smoothing coefficient (given as 0.4)
Dt-1 = demand from the previous year
Ft-1 = forecast from the previous year

Plugging in the given values, we get:

Ft = 0.4(300) + 0.6(750)
Ft = 120 + 450
Ft = 570

Therefore, the forecast for this year using exponential smoothing is 570, which corresponds to choice E.

Question 16

Figure
Professor Z needs to allocate time among several tasks next week to include time for students' appointments.Thus,he needs to forecast the number of students who will seek appointments.He has gathered the following data: 
-What is the forecast for this year using a moving-average forecast based on the last three weeks?
A)49.
B)50.
C)52.
D)65.
E)78.

Accepted Answer

The answer of Figure
Professor Z needs to allocate time among...

Quiz 11: Forecasting

The previous trend line has predicted 18,500 for two years ago,and 19,700 for last year.What was the mean absolute deviation for these forecasts?

Figure An operation analyst is forecasting this year's demand for one of his company's products based on the following historical data: -What is the forecast for this year using a moving-average forecast based on the last four years?

Which of the following would be an advantage of using a sales force composite to develop a demand forecast?

Which of the following is not a type of judgmental forecasting?

Which of the following would be considered a possible drawback of using executive opinions to develop a forecast?

The primary method for causal forecasting is:

Figure An operation analyst is forecasting this year's demand for one of his company's products based on the following historical data: -What is the forecast for this year using exponential smoothing with α\alphaα = 0.2,if the forecast for last year was 15,000?

A manager uses the equation y = 40,000 + 150x to predict monthly receipts.What is the forecast for July if x = 0 in April?

The equation y = 350 - 2.5x is used to predict quarterly demand where x = 0 in the second quarter of last year.Quarterly seasonal factors are Q1 = 1.5,Q2 = 0.8,Q3 = 1.1,and Q4 = 0.6.What is the forecast for the last quarter of this year?

Figure An operation analyst is forecasting this year's demand for one of his company's products based on the following historical data: -What is the forecast for this year using the last-value forecasting method?

The forecasting method which uses anonymous questionnaires to achieve a consensus forecast is:

Figure The business analyst for Ace Business Machines,Inc.wants to forecast this year's demand for manual typewriters based on the following historical data: -What is the forecast for this year using exponential smoothing with α\alphaα = 0.4,if the forecast for two years ago was 750?