Question 1

A seasonal index for a monthly series is about to be calculated on the basis of three years' accumulation of data.The three previous July values were 110,135,and 130.The average over all months is 160.What is the approximate seasonal index for July?

Accepted Answer

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Question 2

Weekly sales of copy paper at Cubicle Suppliers are provided in the table below.Compute a three-period moving average and a four-period moving average for weeks 5,6,and 7.Compute the MAD for both forecasting methods.Which model is more accurate? Forecast week 8 with the more accurate method.
Week Sales (cases)
1 17
2 21
3 27
4 31
5 19
6 17
7 21

Accepted Answer

The answer of Weekly sales of copy paper at Cubicle...

Question 3

Marie Bain is the production manager at a company that manufactures hot water heaters.Marie needs a demand forecast for the next few years to help decide whether to add new production capacity.The company's sales history (in thousands of units)is shown in the table below.Use exponential smoothing with trend adjustment to forecast demand for period 6.The initial forecast for period 1 was 11 units;the initial estimate of trend was 0.The smoothing constants are α = .3 and β = .3

Accepted Answer

The answer of Marie Bain is the production manager at...

Question 4

The quarterly sales for specific educational software over the past three years are given in the following table.Compute the four seasonal factors.

Accepted Answer

The answer of The quarterly sales for specific educational software...

Question 5

A management analyst is using exponential smoothing to predict merchandise returns at an upscale branch of a department store chain.Given an actual number of returns of 154 items in the most recent period completed,a forecast of 172 items for that period,and a smoothing constant of 0.3,what is the forecast for the next period? How would the forecast be changed if the smoothing constant were 0.6? Explain the difference in terms of alpha and responsiveness.

Accepted Answer

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Question 6

The last four weekly values of sales were 80,100,105,and 90 units,respectively.The last four forecasts (for the same four weeks)were 60,80,95,and 75 units,respectively.Calculate the MAD,MSE,and MAPE for these four weeks.

Accepted Answer

The answer of The last four weekly values of sales...

Question 7

Demand for a certain product is forecast to be 8,000 units per month,averaged over all 12 months of the year.The product follows a seasonal pattern,for which the January monthly index is 1.25.What is the seasonally-adjusted sales forecast for January?

Accepted Answer

The answer of Demand for a certain product is forecast...

Question 8

Favors Distribution Company purchases small imported trinkets in bulk,packages them,and sells them to retail stores.The managers are conducting an inventory control study of all their items.The following data are for one such item,which is not seasonal.
a.Use a trend projection to estimate the relationship between time and sales (state the equation).
b.Calculate forecasts for the first four months of the next year.

Accepted Answer

The answer of Favors Distribution Company purchases small imported trinkets...

Question 9

The following trend projection is used to predict quarterly demand: y-hat = 250 - 2.5x,where x = 1 in the first quarter.Seasonal (quarterly)indices are Quarter 1 = 1.5;Quarter 2 = 0.8;Quarter 3 = 1.1;and Quarter 4 = 0.6.What is the seasonally adjusted forecast for the next four quarters?

Accepted Answer

The answer of The following trend projection is used to...

Question 10

The last seven weeks of demand at a new car dealer are shown below.Use a three-period weighted-moving average forecast to determine a forecast for the 8th week using weights of 3,2,and 1 (where the most recent week receives the highest weight).(Round all forecasts to the nearest whole unit. )Calculate the MAD for this forecast (covering all weeks in which error comparisons can be made).What does the MAD indicate?
Week Sales
1 25
2 30
3 27
4 31
5 27
6 29
7 30

Accepted Answer

The answer of The last seven weeks of demand at...

Question 11

The larger the standard error of the estimate,the more accurate the forecasting model.

Accepted Answer

The opposite is true. A larger standard error of the estimate indicates less accuracy in the forecasting model. The standard error of the estimate measures how far off the predicted values are from the actual values, and a larger standard error suggests that there is more variation or noise in the data, making it harder to accurately predict future outcomes.

Question 12

In a regression equation where y-hat is demand and x is advertising,a coefficient of determination (R2)of .70 means that 70% of the variance in advertising is explained by demand.

Accepted Answer

The coefficient of determination (R2) of .70 means that 70% of the variance in the dependent variable (demand) is explained by the independent variable (advertising), not the other way around. Therefore, the statement is false.

Question 13

A small family-owned restaurant uses a seven-day moving average model to determine manpower requirements.These forecasts need to be seasonalized because each day of the week has its own demand pattern.The seasonal indices for each day of the week are: Monday 0.445;Tuesday 0.791;Wednesday 0.927;Thursday 1.033;Friday 1.422;Saturday 1.478;and Sunday 0.903.Average daily demand based on the most recent moving average is 194 patrons.What is the seasonalized forecast for each day of next week?

Accepted Answer

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Question 14

A restaurant has tracked the number of meals served at lunch over the last four weeks.The data show little in terms of trends,but do display substantial variation by day of the week.Use the following information to determine the seasonal (daily)indices for this restaurant.

Accepted Answer

The answer of A restaurant has tracked the number of...

Question 15

A fundamental distinction between trend projection and linear regression is that:

Accepted Answer

Trend projection specifically uses time as the independent variable, while linear regression can use any variable with explanatory power. This is the fundamental distinction between the two methods.

Question 16

What is the forecast for May based on a weighted moving average applied to the following past demand data and using the weights: 4,3,2 (largest weight is for most recent data)?

Accepted Answer

The answer of What is the forecast for May based...

Question 17

Regression lines graphically depict "cause-and-effect" relationships.

Accepted Answer

Regression lines do not necessarily depict "cause-and-effect" relationships, but rather show the relationship between two variables. Correlation does not imply causation.

Question 18

Use exponential smoothing with trend adjustment to forecast deliveries for period 10.Let alpha = 0.4,beta = 0.2,and let the initial trend value be 4 and the initial forecast be 200.

Accepted Answer

The answer of Use exponential smoothing with trend adjustment to...

Question 19

The department manager using a combination of methods has forecast sales of toasters at a local department store.Calculate the MAD for the manager's forecast.Compare the manager's forecast against a naive forecast covering the same time period.Which is better?

Accepted Answer

The answer of The department manager using a combination of...

Question 20

Linear-regression analysis is a straight-line mathematical model to describe the functional relationships between independent and dependent variables.

Accepted Answer

Linear regression analysis is indeed a straight-line mathematical model used to analyze the relationship between two variables.

Quiz 4: Forecasting