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Exam 3: Forecasting

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Question 31

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The primary difference between seasonality and cycles is:

A)  the duration of the repeating patterns.
B)  the magnitude of the variation.
C)  the ability to attribute the pattern to a cause.
D)  the direction of the movement.
E)  there are only four seasons but 30 cycles.

F) None of the above
G) A) and B)

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Question 32

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For new products in a strong growth mode, a low alpha will minimize forecast errors when using exponential smoothing techniques.

A) True
B) False

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Question 33

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The more novel a new product or service design is, the more forecasters have to rely on:

The naive forecast can serve as a quick and easy standard of comparison against which to judge the cost and accuracy of other techniques.

Which of the following changes would tend to shorten the time frame for short-term forecasting?

Which of the following would tend to decrease forecast accuracy?

A control chart involves setting action limits for cumulative forecast error.

Using the latest observation in a sequence of data to forecast the next period is:

Correlation measures the strength and direction of a relationship between variables.

Forecasts based on an average tend to exhibit less variability than the original data.

The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data: $\begin{array} { | l | c | } \hline{ \text { Month } } & \text { Number of Visits } \\\hline \text { April } & 100 \\\hline \text { May } & 140 \\\hline \text { June } & 110 \\\hline \text { July } & 150 \\\hline \text { August } & 120 \\\hline \text { September } & 160 \\\hline\end{array}$ What is this month's forecast using the naive approach?

The president of State University wants to forecast student enrollments for this academic year based on the following historical data: $\begin{array} { | c | c | } \hline \text { Year } & \text { Enrollments } \\\hline \text { 5 Years ago } & 15,000 \\\hline \text { 4 Years ago } & 16,000 \\\hline \text { 3 Years ago } & 18,000 \\\hline \text { 2 Years ago } & 20,000 \\\hline \text { Last Year } & 21,000 \\\hline\end{array}$ What is the forecast for this year using trend-adjusted (double) smoothing with alpha = .05 and beta = .3, if the forecast for last year was 21,000, the forecast for two years ago was 19,000, and the trend estimate for last year's forecast was 1,500?

A manager uses the following equation to predict monthly receipts: Yt = 40,000 + 150t. What is the forecast for July if t = 0 in April of this year?

Given an actual demand of 105, a forecasted value of 97, and an alpha of .4, the simple exponential smoothing forecast for the next period would be:

The Delphi approach involves the use of a series of questionnaires to achieve a consensus forecast.

Suppose a four-period weighted average is being used to forecast demand. Weights for the periods are as follows: wt-4 = 0.1, wt-3 = 0.2, wt-2 = 0.3 and wt-1 = 0.4. Demand observed in the previous four periods was as follows: At-4 = 380, At-3 = 410, At-2 = 390, At-1 = 400. What will be the demand forecast for period t?

Which of the following helps improve supply chain forecasting performance?

Given forecast errors of 5, 0, -4, and 3, what is the mean absolute deviation?

Professor Very Busy needs to allocate time next week to include time for office hours. He needs to forecast the number of students who will seek appointments. He has gathered the following data: What is this week's forecast using exponential smoothing with alpha = .2, if the forecast for two weeks ago was 90?

The president of State University wants to forecast student enrollments for this academic year based on the following historical data: $\begin{array} { | l | c | } \hline \text { Year } & \text { Enrollments } \\\hline \text { 5 Years ago } & 15,000 \\\hline \text { 4 Years ago } & 16,000 \\\hline \text { 3 Years ago } & 18,000 \\\hline \text { 2 Years ago } & 20,000 \\\hline \text { Last Year } & 21,000 \\\hline\end{array}$ What is the forecast for this year using a four-year simple moving average?