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H ome C hapter 4 : Forec as ting

Multiple Choice
Self- Study Q uizzes M ultiple C hoic e

Multiple Choice
This activity contains 16 questions.

T he f or ec ast ing t im e hor izon t hat w ould t y pic ally be easiest t o pr edic t f or w ould be t he
medium-range. intermediate range. short-range. long-range.

A f or ec ast t hat pr ojec t s a c om pany 's sales is a(n):

economic forecast. technological forecast. demand forecast. associative model.

Quant it at iv e m et hods of f or ec ast ing inc lude

sales force composite. consumer market survey. exponential smoothing. jury of executive opinion.

T he m et hod t hat c onsider s sev er al v ar iables t hat ar e r elat ed t o t he v ar iable being pr edic t ed is
weighted moving average. exponential smoothing. multiple regression.

T he f or ec ast ing m odel t hat is based upon salesper son's est im at es of expec t ed sales is

consumer market survey. sales force composite.

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Multiple Choice

delphi method. jury of executive opinion.

Dec om posing a t im e ser ies r ef er s t o br eaking dow n past dat a int o t he c om ponent s of
trends, cycles, seasonal and random variations. strategy, tactical, and operational variations. long-term, short-term, and medium-term variations. constants and variations.

Wit h r egar d t o a r egr ession-based f or ec ast , t he st andar d er r or of t he est im at e giv es a m easur e of

the time period for which the forecast is valid. the variability around the regression line. the time required to derive the forecast equation. the maximum error of the forecast.

When using exponent ial sm oot hing, t he sm oot hing c onst ant

is typically between .75 and .95 for most business applications. indicates the accuracy of the previous forecast. can be determined using MAD. should be chosen to maximize positive bias.

A t r ac king signal

cannot be used with exponential smoothing. that is negative indicates that demand is greater than the forecast. is computed as the mean absolute deviation (MAD) divided by the running sum of the forecast errors (RSFE). must be either 1, 0, or -1 for the first predicted value

If dem and is 106 dur ing Januar y , 120 in F ebr uar y , 134 in Mar c h, and 142 in Apr il, w hat is t he 3-m ont h sim ple m ov ing av er age f or May ?
132
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Multiple Choice

126 142 138

Giv en last per iod's f or ec ast of 65, and last per iod's dem and of 62, w hat is t he sim ple exponent ial sm oot hing f or ec ast w it h an alpha of 0.4 f or t he next per iod?
63.2 65 63.8 62

A f or ec ast ing t ec hnique c onsist ent ly pr oduc es a negat iv e t r ac king signal. T his m eans t hat
the forecasting technique consistently under predicts. the MAPE will also consistently be negative. the forecast technique consistently over predicts. the MSE will also consistently be negative.

A r egr ession m odel is used t o f or ec ast sales based on adv er t ising dollar s spent . T he r egr ession line is y =500+35x and t he c oef f ic ient of det er m inat ion is .90. Whic h is t he best st at em ent about t his f or ec ast ing m odel?
The correlation between sales and advertising is positive. The coefficient of correlation between sales and advertising is 0.81. Even if no money is spent on advertising, the company realizes $35 of sales. For every $35 spent on advertising, sales increase by $1.

Linear r egr ession is m ost sim ilar t o

the nave method of forecasting. the trend projection method of forecasting. the simple moving average method of forecasting. the weighted moving average method of forecasting.

T im e ser ies pat t er ns t hat r epeat t hem selv es af t er a per iod of day s or w eeks ar e c alled
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Multiple Choice

seasonality. cycles. trend. random variation.

Whic h of t he f ollow ing is NOT a t im e-ser ies m odel?

nave approach moving averages linear regression exponential smoothing

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