ch4 Flashcards
T|F: A naïve forecast for September sales of a product would be equal to the forecast for August.
F
T|F: The forecasting time horizon and the forecasting techniques used tend to vary over the life cycle of a product.
T
T|F: Demand (sales) forecasts serve as inputs to financial, marketing, and personnel planning.
T
T|F: Forecasts of individual products tend to be more accurate than forecasts of product families.
F
T|F: Most forecasting techniques assume that there is some underlying stability in the system.
T
T|F: The sales force composite forecasting method relies on salespersons’ estimates of expected sales.
T
T|F: A time-series model uses a series of past data points to make the forecast.
T
T|F: The quarterly “make meeting” of Lexus dealers is an example of a sales force composite forecast.
T
T|F: Cycles and random variations are both components of time series.
T
T|F: A naive forecast for September sales of a product would be equal to the sales in August.
T
T|F: One advantage of exponential smoothing is the limited amount of record keeping involved.
T
T|F: The larger the number of periods in the simple moving average forecasting method, the greater the
method’s responsiveness to changes in demand.
F
T|F: Forecast including trend is an exponential smoothing technique that utilizes two smoothing
constants: one for the average level of the forecast and one for its trend.
T
T|F: Mean Squared Error and Coefficient of Correlation are two measures of the overall error of a
forecasting model.
F
T|F: In trend projection, the trend component is the slope of the regression equation.
T
T|F: In trend projection, a negative regression slope is mathematically impossible.
F
T|F: Seasonal indexes adjust raw data for patterns that repeat at regular time intervals.
T
T|F: If a quarterly seasonal index has been calculated at 1.55 for the October-December quarter, then
raw data for that quarter must be multiplied by 1.55 so that the quarter can be fairly compared to
other quarters.
F
T|F: The best way to forecast a business cycle is by finding a leading variable.
T
T|F: Linear-regression analysis is a straight-line mathematical model to describe the functional
relationships between independent and dependent variables.
T
T|F: The larger the standard error of the estimate, the more accurate the forecasting model.
F
T|F: A trend projection equation with a slope of 0.78 means that there is a 0.78 unit rise in Y for every
unit of time that passes.
T
T|F: 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.
F
T|F: Demand cycles for individual products can be driven by product life cycles.
T
T|F: If a forecast is consistently greater than (or less than) actual values, the forecast is said to be biased.
T
T|F: Focus forecasting tries a variety of computer models and selects the best one for a particular
application.
T
T|F: Many service firms use point-of-sale computers to collect detailed records needed for accurate
short-term forecasts.
T
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
a. yesterday’s forecasted attendance and yesterday’s actual attendance
Using an exponential smoothing model with smoothing constant α = .20, how much weight would
be assigned to the 2nd most recent period?
a. .16
b. .20
c. .04
d. .09
e. .10
a. .16
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
b. are rarely perfect
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
e. job assignments
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
a. short-range, medium-range, and long-range
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
b. medium-range forecast
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
c. long-range time horizon
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
b. economic, technological, and demand
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.
b. Eliminate any assumptions.
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
a. qualitative and quantitative