81) If Brandon Edward were
working to develop a forecast using a moving averages approach, but he noticed
a detectable trend in the historical data, he should
A) use weights to place more
emphasis on recent data
B) use weights to minimize
the importance of the trend
C) change to a naïve
approach
D) use a simple moving
average
E) change to a qualitative
approach
Answer: A
Diff: 2
Topic: Moving averages
Objective: LO4-3
82) __________ forecasts are
concerned with rates of technological progress, which can result in the birth
of exciting new products, requiring new plants and equipment.
Answer: Technological
Diff: 1
Topic: Types of forecasts
Objective: LO4-1
83) __________ forecasts
address the business cycle by predicting inflation rates, money supplies,
housing starts, and other planning indicators.
Answer: Economic
Diff: 2
Topic: Types of forecasts
Objective: LO4-1
84) Demand forecasts, also
called __________ forecasts, are projections of demand for a company's products
or services.
Answer: sales
Diff: 2
Topic: Types of forecasts
Objective: LO4-1
85) __________ forecasts
employ one or more mathematical models that rely on historical data and/or
associative variables to forecast demand.
Answer: Quantitative
Diff: 2
Topic: Forecasting approaches
Objective: LO4-2
86) __________ is a
forecasting technique based upon salespersons' estimates of expected sales.
Answer: Sales force composite
Diff: 2
Topic: Forecasting approaches
Objective: LO4-2
87) __________ forecasts use
a series of past data points to make a forecast.
Answer: Time-series
Diff: 2
Topic: Forecasting approaches
Objective: LO4-2
88) A(n) __________ forecast
uses an average of the most recent periods of data to forecast the next period.
Answer: moving average
Diff: 2
Topic: Forecasting approaches
Objective: LO4-3
89) The smoothing constant
is a weighting factor used in __________.
Answer: exponential smoothing
Diff: 2
Topic: Forecasting approaches
Objective: LO4-3
90) Linear regression is
known as a(n) __________ because it incorporates variables or factors that
might influence the quantity being forecast.
Answer: associative model
Diff: 1
Topic: Forecasting approaches
Objective: LO4-2
91) A measure of forecast
error that does not depend on the magnitude of the item being forecast is the
__________.
Answer: mean absolute percent error or MAPE
Diff: 1
Topic: Forecasting approaches
Objective: LO4-4
92) __________ is a measure
of overall forecast error for a model.
Answer: MAD or Mean Absolute Deviation
Diff: 2
Topic: Forecasting approaches
Objective: LO4-4
93) When one constant is
used to smooth the forecast average and a second constant is used to smooth the
trend, the forecasting method is __________.
Answer: exponential smoothing with trend adjustment or
trend-adjusted smoothing or
second-order smoothing or
double smoothing
Diff: 2
Topic: Forecasting approaches
Objective: LO4-3
94) __________ is a time-series forecasting method that fits a trend line to a
series of historical data points and then projects the line into the future for
forecasts.
Answer: Trend projection
Diff: 2
Topic: Forecasting approaches
Objective: LO4-2
95) The __________ measures
the strength of the relationship between two variables.
Answer: coefficient of correlation
Diff: 2
Topic: Associative forecasting methods: Regression
and correlation analysis
Objective: LO4-6
96) If a barbershop operator
noted that Tuesday's business was typically twice as heavy as Wednesday's, and
that Friday's business was typically the busiest of the week, business at the
barbershop is subject to __________.
Answer: seasonal variations
Diff: 2
Topic: Forecasting approaches: Seasonal variations
in data
Objective: LO4-5
97) __________ forecasting
tries a variety of computer models and selects the best one for a particular
application.
Answer: Focus
Diff: 2
Topic: Monitoring and controlling forecasts
Objective: LO4-7
98) __________ are useful if
we can assume that market demands will stay fairly steady over time.
Answer: Moving averages
Diff: 2
Topic: Moving averages
Objective: LO4-3
99) An approach to
exponential smoothing in which the smoothing constant is automatically changed
to keep errors to a minimum is called __________.
Answer: adaptive smoothing
Diff: 2
Topic: Monitoring and controlling forecasts
Objective: LO4-3
100) A skeptical manager
asks what short-range
forecasts can be used for. Give her three possible uses/purposes.
Answer: Any three of: planning purchasing, job
scheduling, work force levels, job assignments, production levels.
Diff: 2
Topic: What is forecasting?
Objective: LO4-1
101) A skeptical manager
asks what long-range
forecasts can be used for. Give her three possible uses/purposes.
Answer: Any three of: planning new products, capital
expenditures, facility location or expansion, research and development.
Diff: 2
Topic: What is forecasting?
Objective: LO4-1
102) Describe the three
forecasting time horizons and their use.
Answer: Forecasting time horizons are: short
range–generally less than three months, used for purchasing, job scheduling,
work force levels, production levels; medium range–usually from three months up
to three years, used for sales planning, production planning and budgeting,
cash budgeting, analyzing operating plans; long range–usually three years or
more, used for new product development, capital expenditures, facility
planning, and R&D.
Diff: 2
Topic: What is forecasting?
Objective: LO4-1
103) List and briefly
describe the three major types of forecasts.
Answer: The three types are economic, technological,
and demand; economic refers to macroeconomic, growth and financial variables;
technological refers to forecasting amount of technological advance, or
futurism; demand refers to product demand.
Diff: 2
Topic: Types of forecasts
Objective: LO4-2
104) Identify the seven
steps involved in forecasting.
Answer:
1. Determine the use of the
forecast.
2. Select the items that are
to be forecast.
3. Determine the time
horizon of the forecast.
4. Select the forecasting
model(s).
5. Gather the data needed to
make the forecast.
6. Make the forecast.
7. Validate the forecasting
mode and implement the results.
Diff: 2
Topic: Seven steps in the forecasting system
Objective: LO4-2
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