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Operations Management A Supply Chain Process Approach 1St Edition Wisner Test Bank Full Chapter PDF
Operations Management A Supply Chain Process Approach 1St Edition Wisner Test Bank Full Chapter PDF
Multiple Choice
3. Poor forecasting and production planning can negatively impact all of the following except?
a. Customer relationships
b. Product reliability
c. Sales
d. Profitability
Ans: B
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Cognitive Domain: Knowledge
Answer Location: Introduction
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
4. Holding substantial amounts of finished goods for delivery any time that a customer demand is
experienced can result in which negative consequence?
a. Lower product quality
b. More difficult marketing
c. High carrying cost
d. Stockouts
Ans: C
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Cognitive Domain: Knowledge
Answer Location: Introduction
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
5. A company utilizing a flexible pricing approach should be aware of which potential negative
consequence of this approach?
a. Increased sales
b. Stockouts/lost sales
c. Stable demand
d. Reduced forecast accuracy
Ans: B
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Cognitive Domain: Knowledge
Answer Location: Introduction
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
6. Capacity modification in response to fluctuations in demand can result in the following negative
consequences except?
a. Reduced budget available for product transportation
b. Loss of sales as workers are trained
c. Negatively impacted firm reputation from temporary employees
d. Reduced product quality
Ans: A
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Cognitive Domain: Knowledge
Answer Location: Introduction
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
8. The textbook notes that a recent survey of firms indicated that approximately what fraction of firms
were not able to accurately forecast their earnings or sales for the next quarter?
a. 1/10
b. 1/3
c. 2/3
d. 3/4
Ans: C
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Cognitive Domain: Knowledge
Answer Location: Introduction
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
9. The process that balances customer requirements with supply chain capabilities is referred to as?
a. Supply chain management
b. Demand management
c. Supplier management
d. Production management
Ans: B
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Cognitive Domain: Knowledge
Answer Location: Demand Management Defined
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
10. A department store hiring temporary workers to deal with increased demand during the holiday
season is practicing what approach?
a. Seasonal management
b. Store management
c. Demand management
d. Labor management
Ans: C
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Cognitive Domain: Comprehension
Answer Location: Demand Management Defined
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
11. All of the following are approaches that are typically associated with demand management except?
a. Discounting prices to increase demand during slow demand periods
b. Reservation systems
c. Having customers form waiting lines (queues)
d. Providing next-day delivery options
Ans: D
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Cognitive Domain: Comprehension
Answer Location: Demand Management Defined
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
12. New product introductions, promotions, and pricing which impact demand forecasts are the
responsibility of what department within a firm?
a. Operations
b. Distribution
c. Marketing
d. Supply management
Ans: C
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
13. The department within a firm that oversees procurement is likely which of the following?
a. Supply management
b. Operations
c. Distribution
d. Marketing
Ans: A
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Cognitive Domain: Knowledge
Answer Location: Demand Management Defined
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
14. What department within a firm uses demand forecasts to manage inventory and transportation?
a. Operations
b. Distribution
c. Marketing
d. Supply management
Ans: B
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Cognitive Domain: Knowledge
Answer Location: Demand Management Defined
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
15. Which department within a firm uses demand forecasts to make capacity decisions (adding shifts,
adding overtime, or purchasing new equipment)?
a. Operations
b. Distribution
c. Marketing
d. Supply management
Ans: A
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Cognitive Domain: Knowledge
Answer Location: Demand Management Defined
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
16. Which department provides projections for sales that are used as input to the forecasting process?
a. Field sales
b. Distribution
c. Operations
d. Supply management
Ans: A
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Cognitive Domain: Knowledge
Answer Location: Demand Management Defined
Difficulty Level: Easy
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
17. Which of the following most accurately describes the concept of forecasting?
a. Estimate past demand
b. Summarize past sales
c. Estimate future demand
d. Summarize future pricing
Ans: C
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: The Forecasting Process
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
18. Forecasts will __________ have some error between the forecasted values and the actual values.
a. Not likely
b. Likely
c. Neither not likely nor likely
d. Forecasts will be perfect predictions of the future
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: The Forecasting Process
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
19. All of the following may influence demand and should be considered when developing a forecast
except?
a. Economic conditions
b. New competition
c. Supplier quality
d. Emerging markets
Ans: C
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: The Forecasting Process
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
20. All of the following are potential benefits of better forecasts except?
a. Higher inventory levels
b. Reduced stockouts
c. Smoother production plans
d. Reduced costs
Ans: A
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: The Forecasting Process
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
21. A firm makes what type of plans to accommodate unforeseen changes and forecast errors?
a. Continual
b. Contingency
c. Conclusive
d. Contextual
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: The Forecasting Process
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
22. A firm launching a new product for which historical data does not exist would likely use which type of
forecasting technique?
a. Quantitative
b. Qualitative
c. Qualified
d. Quantified
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: Qualitative Forecasting Techniques
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
23. When data available to a firm is too old to be useful, what type of forecasting technique should the
firm consider?
a. Quantitative
b. Qualitative
c. Qualified
d. Quantified
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: Qualitative Forecasting Techniques
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
24. Apple’s forecasts for the first iPad tablets were likely which type of forecast?
a. Quantitative
b. Qualitative
c. Qualified
d. Quantified
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: Qualitative Forecasting Techniques
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
25. Relying on field sales personnel to provide estimates of customer needs is referred to as which type
of qualitative forecasting technique?
a. Consumer surveys
b. Delphi method
c. Jury of executive opinion
d. Sale force estimates
Ans: D
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: Sales Force Estimates
Difficulty Level: Easy
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
26. The use of focus groups to estimate a demand forecast is referred to as which type of qualitative
forecasting technique?
a. Consumer surveys
b. Delphi method
c. Jury of executive opinion
d. Sale force estimates
Ans: A
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: Consumer Surveys
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
27. A qualitative forecasting technique that relies on group convergence of forecasts is referred to as?
a. Consumer surveys
b. Delphi method
c. Jury of executive opinion
d. Sale force estimates
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: Delphi Method
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
29. Why might field sales personnel be able to develop a good forecast for demand?
a. They are motivated by bonuses
b. They are distanced from the customers and markets
c. They are close to a firm’s suppliers
d. They are close to the customers and markets
Ans: D
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: Sales Force Estimates
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
30. The Delphi method is particularly useful because it can avoid what problem?
a. Group think
b. The voice of the customer
c. Wisdom of crowds
d. The Peter principle
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
Ans: A
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: Delphi Method
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
32. Quantitative forecasting techniques that are based on assuming that the future can be predicted by
the past are referred to as?
a. Associative forecasts
b. Time series forecasts
c. Qualitative forecasts
d. Delphi method
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: Quantitative Forecasting Techniques
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
33. For long-term forecasts, it is recommended that which type of forecasts be used?
a. Quantitative
b. Associative
c. Qualitative
d. Forecasts cannot be developed for the long term
Ans: C
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: Quantitative Forecasting Techniques
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
34. All of the following are typical components of a time series except?
a. Trend
b. Seasonality
c. Clustered
d. Random variation
Ans: C
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: Components of Time Series
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
35. Trend variation in a time series would most likely be characterized as?
a. Rapidly decreasing demand
b. Gradually increasing demand
c. Gradually increasing or decreasing demand
d. Demand pattern influenced by seasonal factors
Ans: C
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: Components of Time Series
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
36. A bakery has experienced a slow and steady increase in demand for its products. The bakery is most
likely experiencing which time series demand component?
a. Trend
b. Seasonality
c. Cyclical
d. Random variation
Ans: A
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Application
Answer Location: Components of Time Series
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
37. Demand patterns that occur every several years and are influenced by macroeconomic and political
factors are referred to as?
a. Trend
b. Seasonality
c. Cyclical
d. Random variation
Ans: C
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: Components of Time Series
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
38. Economic fluctuations (recessions or expansions) are examples of which time series demand
component?
a. Trend
b. Seasonality
c. Cyclical
d. Random variation
Ans: C
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: Components of Time Series
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
39. The manager of a luxury car rental company has noticed that demand for rentals is highly dependent
on the state of the national economy. When the economy is performing well, she experiences lots of
demand. However, when the economy is poor, she experiences very little demand. This demand pattern
is likely an example of?
a. Trend
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
b. Seasonality
c. Cyclical
d. Random variation
Ans: C
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Application
Answer Location: Components of Time Series
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
40. Sales of ski equipment would likely be representative of which type of demand pattern?
a. Trend
b. Seasonality
c. Cyclical
d. Random variation
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: Components of Time Series
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
43. Using the average of recent historical demand to generate a forecast is referred to as what
technique?
a. Simple moving average
b. Weighted moving average
c. Exponential smoothing
d. Linear trend forecast
Ans: A
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
44. A salesperson has been asked to forecast her sales for the next month. To do so, she decides to
average her sales from the past three months. This forecasting technique is referred to as?
a. Simple moving average
b. Weighted moving average
c. Exponential smoothing
d. Linear trend forecast
Ans: A
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Application
Answer Location: Time Series Forecasting Techniques
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
45. A forecasting technique that uses an average of previous observations, with each observation being
weighted, is which technique?
a. Simple moving average
b. Linear trend forecast
c. Exponential smoothing
d. Weighted moving average
Ans: D
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: Time Series Forecasting Techniques
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
46. Exponential smoothing relies on a weighted difference between the current period’s _________ and
________.
a. Actual data and the previous period’s actual data
b. Actual data and the current period’s forecast
c. Actual data and the previous period’s forecast
d. Actual data and the next period’s actual data
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: Time Series Forecasting Techniques
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
47. A forecasting method used when there is a single independent variable (time) and a dependent
variable (often demand) and the two variables are linearly related is?
a. Linear trend forecast
b. Simple linear regression forecast
c. Multiple regression forecast
d. Exponential smoothing forecast
Ans: A
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: Time Series Forecasting Techniques
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
48. A causal model that predicts demand when the independent variable and the dependent variable are
linearly related is?
a. Linear trend forecast
b. Simple linear regression forecast
c. Multiple regression forecast
d. Exponential smoothing forecast
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: Time Series Forecasting Techniques
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
49. A model when there are several independent variables that are linearly related to demand is?
a. Linear trend forecast
b. Simple linear regression forecast
c. Multiple regression forecast
d. Exponential smoothing forecast
Ans: C
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: Time Series Forecasting Techniques
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
50. The simple moving average forecasting technique tends to work well when?
a. Demand rapidly increases then decreases
b. Demand is stable over time
c. Demand is highly variable
d. Demand rapidly decreases then increases
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: The Simple Moving Average Forecast
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
51. Joe’s Donut Hole sold 1,500 donuts in January, 1,600 in February, and 1,550 in March. What is the
four period simple moving average forecast for April?
a. The four period simple moving average cannot be determined from the information given
b. 1,550
c. 1,600
d. 1,575
Ans: A
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: The Simple Moving Average Forecast
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
52. Joe’s Donut Hole sold 1,500 donuts in January, 1,600 in February, and 1,550 in March. What is the
three period simple moving average forecast for April?
a. The three period simple moving average cannot be determined from the information given
b. 1,550
c. 1,600
d. 1,575
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: The Simple Moving Average Forecast
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
53. Joe’s Donut Hole sold 1,500 donuts in January, 1,600 in February, and 1,550 in March. What is the
two period simple moving average forecast for April?
a. The two period simple moving average cannot be determined from the information given
b. 1,550
c. 1,600
d. 1,575
Ans: D
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Application
Answer Location: The Simple Moving Average Forecast
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
61. In Q1, a firm sold 23,000 units of a particular product. In Q2, the firm sold 25,000, and in Q3 22,850
units were sold. Assume weights of 0.5, 0.3, and 0.2 (descending for older data). What is the three period
weighted moving average forecast for Q4?
a. 23,616
b. 23,525
c. 22,850
d. Forecast for Q4 cannot be determined from the information given
Ans: B
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Application
Answer Location: The Weighted Moving Average Forecast
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
62. In Q1, a firm sold 23,000 units of a particular product. In Q2, the firm sold 25,000 and in Q3 22,850
units were sold. Assume weights of 0.7 and 0.3 (descending for older data). What is the two period
weighted moving average forecast for Q4?
a. 23,616
b. 23,525
c. 23,495
d. Forecast for Q4 cannot be determined from the information given
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: The Weighted Moving Average Forecast
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
63. With appropriate selection of weights, the weighted moving average forecasting technique is?
a. More responsive to changes in the data than the simple moving average
b. Less responsive to changes in the data than the simple moving average
c. Neither more nor less responsive to changes in the data than the simple moving average
d. Cannot be compared to the simple moving average
Ans: A
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: The Weighted Moving Average Forecast
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
66. The exponential smoothing forecasting technique tends to work well when?
a. Demand rapidly increases then decreases
b. Demand is stable over time
c. Demand is highly variable
d. Demand rapidly decreases then increases
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: The Exponential Smoothing Forecast
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
67. As the exponential smoothing constant increases, the resulting forecast tends to?
a. Become less responsive to changes in the previous period’s demand
b. Become more responsive to changes in the previous period’s demand
c. Become neither more nor less responsive to changes in the previous period’s demand
d. It is impossible to determine how the forecast will change due to changes in the smoothing constant
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: The Exponential Smoothing Forecast
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
68. The initial period’s forecast for the exponential smoothing technique can be estimated by?
a. Randomly selecting a forecast value
b. Selecting a forecast value of zero
c. Selecting a forecast value using linear regression
d. Setting the first period’s forecast equal to the first period’s demand
Ans: D
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: The Exponential Smoothing Forecast
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
69. Chairman Cat Products produces cat trees that are sold by several large pet stores. They sold 190,
210, and 208 cat trees in January, February, and March, respectively. What would be a reasonable
estimate for the forecast value for January to initialize the exponential smoothing forecast?
a. 210
b. 208
c. 190
d. 0
Ans:
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Analysis
Answer Location: The Exponential Smoothing Forecast
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
70. Chairman Cat Products produces cat trees that are sold by several large pet stores. They sold 190,
210, and 208 cat trees in January, February, and March, respectively. Assuming that the first forecast
value (for January) is set to 190, what is the exponential smoothing forecast for February? Assume a
smoothing constant value of 0.7.
a. 190
b. 204
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
c. 206.8
d. Cannot be determined from the information given
Ans: A
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Analysis
Answer Location: The Exponential Smoothing Forecast
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
71. Chairman Cat Products produces cat trees that are sold by several large pet stores. They sold 190,
210, and 208 cat trees in January, February, and March, respectively. Assuming that the first forecast
value (for January) is set to 190, what is the exponential smoothing forecast for March? Assume a
smoothing constant value of 0.4.
a. 190
b. 198
c. 202
d. Cannot be determined from the information given
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Analysis
Answer Location: The Exponential Smoothing Forecast
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
72. Chairman Cat Products produces cat trees that are sold by several large pet stores. They sold 190,
210, and 208 cat trees in January, February, and March, respectively. Assuming that the first forecast
value (for January) is set to 190, what is the exponential smoothing forecast for March? Assume a
smoothing constant value of 0.4.
a. 190
b. 198
c. 202
d. Cannot be determined from the information given
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Analysis
Answer Location: The Exponential Smoothing Forecast
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
73. Chairman Cat Products produces cat trees that are sold by several large pet stores. They sold 190,
210, and 208 cat trees in January, February, and March, respectively. Assuming that the first forecast
value (for January) is set to 190, what is the exponential smoothing forecast for April? Assume a
smoothing constant value of 0.4.
a. 190
b. 198
c. 202
d. Cannot be determined from the information given
Ans: C
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Analysis
Answer Location: The Exponential Smoothing Forecast
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
74. Chairman Cat Products produces cat trees that are sold by several large pet stores. They sold 190,
210, and 208 cat trees in January, February, and March, respectively. Assuming that the first forecast
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
value (for January) is set to 190, what is the exponential smoothing forecast for May? Assume a
smoothing constant value of 0.4.
a. 190
b. 198
c. 202
d. Cannot be determined from the information given
Ans: D
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Analysis
Answer Location: The Exponential Smoothing Forecast
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
75. When linear trend forecasts are developed, demand would typically be?
a. The independent variable
b. The dependent variable
c. The intrinsic variable
d. The developed variable
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: Linear Trend Forecasts
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
77. If a trend line is given as Demand = 55 + 7.8(Time), then what is the predicted demand when Time
equals 10?
a. -23
b. 62.8
c. 133
d. The predicted demand cannot be determined from the information given
Ans: C
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Analysis
Answer Location: Linear Trend Forecasts
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
78. If a trend line is given as Demand = 55 + 7.8(Time) then what is the predicted demand when Time
equals 0?
a. 55
b. 62.8
c. 133
d. The predicted demand cannot be determined from the information given
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
Ans: A
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Analysis
Answer Location: Linear Trend Forecasts
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
79. If a trend line is given as Demand = 135 – 14(Time) then what is the slope of the trend line?
a. 121
b. 135
c. -14
d. The slope cannot be determined from the information given
Ans: C
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Analysis
Answer Location: Linear Trend Forecasts
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
80. If a trend line is given as Demand = 65 + 21(Time) then what is the vertical axis intercept of the trend
line?
a. 65
b. 21
c. 76
d. The slope cannot be determined from the information given
Ans: A
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Analysis
Answer Location: Linear Trend Forecasts
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
81. In a simple linear regression forecast, it is assumed that changes in _________ predict changes in
__________.
a. Demand, the causal variable
b. The slope, the causal variable
c. The intercept, the slope
d. The causal variable, demand
Ans: D
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: Simple Linear Regression Forecasts
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
82. The relationship between independent and dependent variables can be measured by?
a. The sample causation coefficient
b. The sample corollary coefficient
c. The sample correlation coefficient
d. The sample construct coefficient
Ans: C
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: Simple Linear Regression Forecasts
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
83. The measure of the variation in the dependent variable that can be explained by the independent
variable is?
a. The sample coefficient of direction
b. The sample coefficient of determination
c. The sample coefficient of division
d. The sample correlation coefficient
Ans: B
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: Simple Linear Regression Forecasts
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
87. _______ occurs when a forecast has a tendency to be either consistently higher or lower than the
actual demand.
a. Forecast correction
b. Forecast bias
c. Forecast discrimination
d. Forecast creep
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
Ans: B
Learning Objective: LO 6.3: Compare the accuracies of forecasting techniques
Cognitive Domain: Knowledge
Answer Location: Forecast Accuracy
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
88. If actual demand for a period was 110 and the forecast for that period was 105, what is the forecast
error for the period?
a. 5
b. -5
c. 0
d. Forecast error cannot be determined by the information given
Ans: A
Learning Objective: LO 6.3: Compare the accuracies of forecasting techniques
Cognitive Domain: Comprehension
Answer Location: Forecast Accuracy
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
90. In May, a firm experienced a forecast error of -25. In June and July, the forecast errors were found to
be -10 and 20, respectively. What is the firm’s forecast MAD for these three months?
a. -15
b. -5
c. 18.3
d. MAD cannot be determined from the information provided
Ans: C
Learning Objective: LO 6.3: Compare the accuracies of forecasting techniques
Cognitive Domain: Comprehension
Answer Location: Forecast Accuracy
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
91. Buyer and supplier cooperation in a supply chain may be referred to as what concept?
a. CFR
b. CPR
c. CPFR
d. CRPF
Ans: C
Learning Objective: LO 6.4: Describe the collaborative planning, forecasting, and replenishment process
Cognitive Domain: Knowledge
Answer Location: Collaborative Planning, Forecasting, and Replenishment
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
95. Meeting forecasted demand while minimizing costs and maximizing customer service over a series of
planning periods is broadly referred to as?
a. Aggregate planning
b. Firms acting independently
c. Firms acting in their own best interest
d. Firms sharing information
Ans: A
Learning Objective: LO 6.4: Describe the collaborative planning, forecasting, and replenishment process
Cognitive Domain: Knowledge
Answer Location: Aggregate Planning
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
Learning Objective: LO 6-4: Describe the collaborative planning, forecasting, and replenishment process
Cognitive Domain: Knowledge
Answer Location: Collaborative Planning, Forecasting, and Replenishment
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
97. Meeting forecasted demand while minimizing costs and maximizing customer service over a series of
planning periods is broadly referred to as?
a. Aggregate planning
b. Collaborative planning
c. Supply chain management
d. Value chain management
Ans: A
Learning Objective: LO 6.5: Explain how aggregate planning is used to meet the objectives of the firm
Cognitive Domain: Knowledge
Answer Location: Aggregate Planning
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
98. Different products that share similar characteristics, components, and/or manufacturing processes are
referred to as?
a. A product grouping
b. A product flock
c. A product matching
d. A product family
Ans: D
Learning Objective: LO 6.5: Explain how aggregate planning is used to meet the objectives of the firm
Cognitive Domain: Knowledge
Answer Location: Aggregate Planning for Manufacturers
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
100. Which production planning strategy maintains a core workforce while using overtime, temporary, or
part-time workers to manage demand fluctuations?
a. Chase strategy
b. Level strategy
c. Mixed strategy
d. No strategy exists that varies production to match demand
Ans: C
Learning Objective: LO 6.5: Explain how aggregate planning is used to meet the objectives of the firm
Cognitive Domain: Comprehension
Answer Location: Aggregate Planning for Manufacturers
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
True/False
1. Forecast quality is likely to only impact inventory levels of finished goods, raw materials, and
components.
Ans: False
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Cognitive Domain: Comprehension
Answer Location: Introduction
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
2. Demand management is broadly defined as the process that balances customer requirements with
supply chain capabilities.
Ans: True
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Cognitive Domain: Knowledge
Answer Location: Demand Management Defined
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
5. When developing a forecast, sales force personnel might be inclined to overestimate demand to
achieve greater bonuses.
Ans: False
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: Sales Force Estimates
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
6. Forecasts that use historical demand to predict future demand are known as associative forecasts.
Ans: False
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
8. A donut shop located at a popular beach experiencing demand that fluctuates with the tourist seasons
is experiencing cyclical variation in demand.
Ans: False
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: Components of Time Series
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
10. Averaging fewer periods tends to make the moving average forecast more responsive.
Ans: True
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: Time Series Forecasting Techniques
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
11. The weighted moving average forecasting technique tends to do a good job tracking trend in demand.
Ans: False
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: The Weighted Moving Average Forecast
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
12. The exponential smoothing forecast technique is widely used due to its relative simplicity.
Ans: True
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Comprehension
Answer Location: The Exponential Smoothing Forecast
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
13. Forecast error is defined as the forecast minus the actual demand for a period.
Ans: False
Learning Objective: LO 6.3: Compare the accuracies of forecasting techniques
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
14. In CPFR, trading partners should exercise caution and be reluctant to share information.
Ans: False
Learning Objective: LO 6.4: Describe the collaborative planning, forecasting, and replenishment process
Cognitive Domain: Comprehension
Answer Location: Collaborative Planning, Forecasting, and Replenishment
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
Short Answer
1. Information sharing among supply chain partners is likely to ___________ forecast accuracy.
Ans: Improve
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Cognitive Domain: Comprehension
Answer Location: Introduction
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
3. The two basic forecasting techniques are qualitative and ___________ forecasting.
Ans: Quantitative
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: The Forecasting Process
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
4. ____________ are used to gather consumer opinions on existing products, new product ideas, future
buying habits, and opinions of competitor products.
Ans: Consumer surveys
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
5. __________ are forecasts that are based on the assumption that the future is an extension of the past.
Ans: Time series forecasts
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: Quantitative Forecasting Techniques
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
9. The __________ of errors are used to prevent the cancellation of negative and positive errors.
Ans: Absolute values
Learning Objective: LO 6.3: Compare the accuracies of forecasting techniques
Cognitive Domain: Comprehension
Answer Location: Forecast Accuracy
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
10. Walmart is known as a leader in supply chain collaboration efforts that are typically referred to as
____________.
Ans: Collaborative Planning, Forecasting, and Replenishment (CPFR)
Learning Objective: LO 6.4: Describe the collaborative planning, forecasting, and replenishment process
Cognitive Domain: Comprehension
Answer Location: Collaborative Planning, Forecasting, and Replenishment
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
Essay
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
1. A large manufacturer of skis and ski accessories has traditionally relied on guesswork to develop
forecasts for demand for most of its items. How might this company benefit from using a more formal or
proven forecasting technique?
Ans: A successful answer will describe the negative potential results of guesswork forecasting. These
could include inaccurate, distorted forecasts that lead to carrying too little or too much inventory.
Suggestions for how formal forecasting techniques seek to fix these issues should be made.
Learning Objective: LO 6.1: Describe the demand management, forecasting, and aggregate planning
processes
Cognitive Domain: Analysis
Answer Location: Introduction
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
2. Describe how accurate forecasting can benefit a firm. Provide several hypothetical benefits that a
coffee shop might experience by improving its demand forecasting.
Ans: A successful answer will list several of the benefits of better forecasting listed in the textbook or from
external references. In the context of a coffee shop, benefits might include better managed inventory
levels and reduced costs.
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Knowledge
Answer Location: The Forecasting Process
Difficulty Level: Easy
AACSB Standard: Systems and processes in organizations
3. In what situations might the use of a simple moving average be appropriate? Provide at least one
example (hypothetical or otherwise).
Ans: A successful answer should note how the simple moving average is best for demand that is
relatively stable. A relevant example of a product or service with stable demand should be provided.
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Analysis
Answer Location: The Simple Moving Average Forecast
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
4. Describe why a forecaster may wish to use a weighted moving average forecast with more recent data
weighted more heavily than older data. Provide at least one example (hypothetical or otherwise).
Ans: A successful answer should note that the weighted moving average weights more recent data to
account for recent changes to the data or recently changed conditions. A relevant example of a product or
service for which more recent data should be valued over older data should be provided.
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Analysis
Answer Location: The Weighted Moving Average Forecast
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
5. How might an organization use linear trend forecasting to predict demand? How does the linear trend
technique differ from techniques such as the simple moving average?
Ans: A successful answer will indicate that linear trend forecasting is appropriate when time and the
dependent variable (demand) are linearly related. The answer should also note that methods like the
simple moving average are not well-suited for data with trend.
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Analysis
Answer Location: Linear Trend Forecasts
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
Instructor Resource
Wisner, Operations Management
SAGE Publishing, 2017
6. How might an organization use simple linear regression forecasting? How does this technique differ
from the linear trend forecasting technique?
Ans: A successful answer will indicate that simple linear regression is appropriate when there is a linear
causal relationship between a dependent variable and an independent variable. Linear trend forecasting
is typically used when the independent variable is time.
Learning Objective: LO 6.2: Explain why forecasts are necessary and how they are used
Cognitive Domain: Analysis
Answer Location: Simple Linear Regression Forecasts
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
7. Describe how forecast accuracy is determined. Why are the absolute values of errors considered rather
than the errors themselves?
Ans: A successful answer should note how forecast errors are calculated. The answer should then
explain that absolute errors are used to prevent the cancellation of negative and positive errors (giving a
forecast that appears to be misleadingly good).
Learning Objective: LO 6.3: Compare the accuracies of forecasting techniques
Cognitive Domain: Analysis
Answer Location: Forecast Accuracy
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
8. Briefly describe collaborative planning, forecasting, and replenishment. Why might a firm and its supply
chain choose to utilize CPFR?
Ans: A successful answer will indicate that CPFR is the cooperative management of inventory in a supply
chain. The answer will also describe how CPFR benefits a firm and the supply chain by reducing
uncertainty, reducing lead times, and increasing sales.
Learning Objective: LO 6.4: Describe the collaborative planning, forecasting, and replenishment process
Cognitive Domain: Analysis
Answer Location: Collaborative Planning, Forecasting, and Replenishment
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
9. Why do firms utilize aggregate planning? Provide at least one hypothetical example of a product or
service that might be managed by aggregate planning.
Ans: A successful answer will describe the purpose of aggregate planning (to coordinate the translation of
demand forecasts into production plans). The answer should then note an example from the textbook or
from outside resources.
Learning Objective: LO 6.5: Explain how aggregate planning is used to meet the objectives of the firm
Cognitive Domain: Analysis
Answer Location: Aggregate Planning
Difficulty Level: Medium
AACSB Standard: Systems and processes in organizations
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luulen. Mutta en minä sitä tarkoittanut. Tarkoitin hevostanne.»
»Mitä?»
»En ymmärrä.»
»Tietenkin olin siellä», hän virkkoi. »En ole koskaan nähnyt mitään
sen kaltaisia. Olen nähnyt kaikenlaisia urheilukilpailuja,
sirkustemppuja ja ratsastusta ja olen lukenut sellaisesta paljonkin,
mutta» — ja hänen äänensä kävi miettiväksi, »mutta että miehet
tosiaan tekevät jotakin sellaista — aivan noin päivätyökseen! En olisi
koskaan voinut uneksiakaan, että sellaisia miehiä todellakin on
olemassa.»
Suurella laitumella.
Kilty oli juhlilla ollut erittäin ystävällinen Philiä kohtaan. Kitty olikin
aina ystävällinen — melkein aina. Mutta hänen ystävällisyydestään
huolimatta oli Phil ollut huomaavinaan, ettei hänen
ratsastuskilpailussa saavuttamansa palkinto ollut tehnyt tyttöön
suurtakaan vaikutusta. Phil ei itsekään pannut palkinnolle suuria
arvoa, mutta hän oli päättänyt voittaa mestaruuden sen huomattavan
rahasumman takia, joka seurasi palkintoa. Tämä rahasumma oli
varsin olennaisena osana unelmassa, joka jo kauan oli väikkynyt
Philin mielessä ja joka kuului niihin asioihin, joista hän ei kenellekään
puhunut. Niinpä hän olikin itse asiassa ratsastanut ei palkinnon,
vaan unelmiensa takia, ja siksi oli Kittyn mielipiteellä hänen
silmissään suuri merkitys.
Kuin jokin vaistomainen aavistus olisi ohjannut hänen liikkeitään
käänsi Phil Acton katseensa Kittyn kodista kaukaista Metsärajaa
kohden, missä edellisenä päivänä oli tavannut muukalaisen. Koko
matkan ratsastaessaan kotiin hän oli ajatellut miestä ja koettanut
selittää itselleen hänen läsnäoloaan maassa, joka näytti niin suuresti
poikkeavan siitä ympäristöstä, johon hän oli tottunut. Yhdestä
seikasta Phil oli varma: miestä painoi suuri ja raskas huoli. Mitä
enemmän hän ajatteli asiaa, sitä varmemmin hän tunsi häirinneensä
muukalaista hetkellä, jonka tämä oli omistanut yksinäisyydessä
ratkaistaville mietteille ja taisteluille. Tämä tunne oli pidättänyt Philiä
kertomasta kohtauksesta ainoallekaan ihmiselle — vieläpä
Rovastillekin ja »Äidille», kuten Phil sanoi rouva Baldwinia. Kenties
tämä tunne oli myöskin pohjaltaan syynä siihen myötätuntoon, jota
Phil ensi hetkestä alkaen oli tuntenut muukalaista kohtaan, sillä
Philillä oli itselläänkin hetkiä, jolloin hän ei halunnut kenenkään
lukevan ajatuksiaan.
Aitauksessa.
»Lorua!» huusi pikku Billy kiihdyksissään. »Ei ole sitä hevosta, jota
Phil ei saisi tottelemaan. Vai mitä, Phil?»
Paimenet nyökkäsivät.