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Exam 3: Forecasting

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Question 31

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Which of the following are used to describe the degree of error?

A) Weighted moving average
B) Regression
C) Moving average
D) Forecast as a percent of actual
E) Mean absolute deviation

F) A) and B)
G) C) and D)

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Question 32

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You are hired as a consultant to advise a small firm on forecasting methodology.Based on your research you find the company has a MAD of 3.Its wants to have a 99.7 percent control limits on its forecasting system.It's most recent tracking signal value is 15.What should be your report to the company?

A) The forecasting model is operating acceptably
B) The forecasting model is out of control and needs to be corrected
C) The MAD value is incorrect
D) The upper control value is less than 20
E) The company is using an inappropriate forecasting methodology

F) C) and D)
G) A) and E)

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Question 33

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In business forecasting,what is usually considered a medium-term time period?

A company wants to forecast demand using the weighted moving average.If the company uses two prior yearly sales values ,and we want to weight year 2012 at 35% and year 2013 at 65%,what is the weighted moving average forecast for Year 2014? __________________________________________

Simple exponential smoothing lags changes in demand.

In most cases,demand for products or services can be broken into several components.Which of the following is considered a component of demand?

Exponential smoothing is always the best and most accurate of all forecasting models.

A restriction in using linear regression is that it assumes that past data and future projections fall on or near a straight line.

Random errors can be defined as those that cannot be explained by the forecast model being used.

In causal relationship forecasting leading indicators are used to forecast occurrences.

Which of the following forecasting methodologies is considered a causal forecasting technique?

The value of the smoothing constant alpha in an exponential smoothing model is between 0 and 1.

A company has actual unit demand for four consecutive years of 100,105,135,and 150.The respective forecasts were 120 for all four years.Which of the following is the resulting MAD value that can be computed from this data?

A good forecaster is one who develops special skills and experience at one forecasting technique and is capable of applying it to widely diverse situations.

A time series is defined in the text as chronologically ordered data that may contain one or more components of demand variation: trend,seasonal,cyclical,autocorrelation,and random.

Which of the following forecasting methodologies is considered a time series forecasting technique?

A central premise of exponential smoothing is that more recent data is less indicative of the future than data from the distant past.

If you were selecting from a variety of forecasting models based on MAD,which of the following MAD values from the same data would reflect the most accurate model?

A company hires you to develop a linear regression forecasting model.Based on the company's historical sales information,you determine the intercept value of the model to be 1,200.You also find the slope value is minus 50.If after developing the model you are given a value of X = 10,which of the following is the resulting forecast value using this model?

In business forecasting,what is usually considered a long-term time period?