In a regression equation where Y 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.

21) In a regression equation where Y 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.

Answer:  FALSE

Diff: 2

Topic:  Associative forecasting methods: Regression and correlation analysis

Objective:  LO4-6

22) Demand cycles for individual products can be driven by product life cycles.

Answer:  TRUE

Diff: 2

Topic:  Time-series forecasting

Objective:  LO4-5

23) If a forecast is consistently greater than (or less than) actual values, the forecast is said to be biased.

Answer:  TRUE

Diff: 2

Topic:  Monitoring and controlling forecasts

Objective:  LO4-4

24) Focus forecasting tries a variety of computer models and selects the best one for a particular application.

Answer:  TRUE

Diff: 2

Topic:  Monitoring and controlling forecasts

Objective:  LO4-4

25) Many service firms use point-of-sale computers to collect detailed records needed for accurate short-term forecasts.

Answer:  TRUE

Diff: 2

Topic:  Forecasting in the service sector

Objective:  LO4-4

26) Economic forecasts drive a company's projections for production.

Answer:  FALSE

Diff: 1

Topic:  Types of forecasts

Objective:  LO4-1

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

Answer:  FALSE

Diff: 2

Topic:  Correlation coefficients for regression lines

Objective:  LO4-6

28) What two numbers are contained in the daily report to the CEO of Walt Disney Parks & Resorts regarding the six Orlando parks?

A) yesterday's forecasted attendance and yesterday's actual attendance

B) yesterday's actual attendance and today's forecasted attendance

C) yesterday's forecasted attendance and today's forecasted attendance

D) yesterday's actual attendance and last year's actual attendance

E) yesterday's forecasted attendance and the year-to-date average daily forecast error

Answer:  A

Diff: 2

Topic:  Global company profile

Objective:  no LO

29) Forecasts

A) become more accurate with longer time horizons

B) are rarely perfect

C) are more accurate for individual items than for groups of items

D) all of the above

E) none of the above

Answer:  B

Diff: 2

Topic:  What is forecasting?

Objective:  LO4-1

30) One use of short-range forecasts is to determine

A) production planning

B) inventory budgets

C) research and development plans

D) facility location

E) job assignments

Answer:  E

Diff: 2

Topic:  What is forecasting?

Objective:  LO4-1

31) Forecasts are usually classified by time horizon into three categories

A) short-range, medium-range, and long-range

B) finance/accounting, marketing, and operations

C) strategic, tactical, and operational

D) exponential smoothing, regression, and time series

E) departmental, organizational, and industrial

Answer:  A

Diff: 1

Topic:  What is forecasting?

Objective:  LO4-1

32) A forecast with a time horizon of about 3 months to 3 years is typically called a

A) long-range forecast

B) medium-range forecast

C) short-range forecast

D) weather forecast

E) strategic forecast

Answer:  B

Diff: 2

Topic:  What is forecasting?

Objective:  LO4-1

33) Forecasts used for new product planning, capital expenditures, facility location or expansion, and R&D typically utilize a

A) short-range time horizon

B) medium-range time horizon

C) long-range time horizon

D) naive method, because there is no data history

E) all of the above

Answer:  C

Diff: 2

Topic:  What is forecasting?

Objective:  LO4-1

34) The three major types of forecasts used by business organizations are

A) strategic, tactical, and operational

B) economic, technological, and demand

C) exponential smoothing, Delphi, and regression

D) causal, time-series, and seasonal

E) departmental, organizational, and territorial

Answer:  B

Diff: 2

Topic:  Types of forecasts

Objective:  LO4-2

35) Which of the following is not a step in the forecasting process?

A) Determine the use of the forecast.

B) Eliminate any assumptions.

C) Determine the time horizon.

D) Select forecasting model.

E) Validate and implement the results.

Answer:  B

Diff: 2

Topic:  The strategic importance of forecasting

Objective:  LO4-2

36) The two general approaches to forecasting are

A) qualitative and quantitative

B) mathematical and statistical

C) judgmental and qualitative

D) historical and associative

E) judgmental and associative

Answer:  A

Diff: 1

Topic:  Forecasting approaches

Objective:  LO4-2

37) Which of the following uses three types of participants: decision makers, staff personnel, and respondents?

A) executive opinions

B) sales force composites

C) the Delphi method

D) consumer surveys

E) time series analysis

Answer:  C

Diff: 2

Topic:  Forecasting approaches

Objective:  LO4-2

38) The forecasting model that pools the opinions of a group of experts or managers is known as the

A) sales force composition model

B) multiple regression

C) jury of executive opinion model

D) consumer market survey model

E) management coefficients model

Answer:  C

Diff: 2

Topic:  Forecasting approaches

Objective:  LO4-2

39) Which of the following is not a type of qualitative forecasting?

A) executive opinions

B) sales force composites

C) consumer surveys

D) the Delphi method

E) moving average

Answer:  E

Diff: 2

Topic:  Forecasting approaches

Objective:  LO4-2

40) Which of the following techniques uses variables such as price and promotional expenditures, which are related to product demand, to predict demand?

A) associative models

B) exponential smoothing

C) weighted moving average

D) simple moving average

E) time series

Answer:  A

Diff: 2

Topic:  Forecasting approaches

Objective:  LO4-2