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Exam 3: Forecasting

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Question 21

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When forecast errors occur in a normally distributed pattern,the ratio of the mean absolute deviation to the standard deviation is 2 to 1,or 2 x MAD = 1 standard deviation.

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Question 22

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Because the factors governing demand for products are very complex,all forecasts of demand contain error.

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Question 23

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If a firm produced a product that was experiencing growth in demand,the smoothing constant alpha (reaction rate to differences) used in an exponential smoothing forecasting model would tend to be which of the following?

When analyzing time series data,if demand data contains both seasonal and trend effects at the same time,what are the two ways that they can relate to each other discussed in the text? 1)___________________________ 2)___________________________

We usually associate the word "seasonal" with recurrent periods of repetitive activity that happen on other than an annual cycle.

Which of the following is not one of the basic types of forecasting?

A company wants to generate a forecast for unit demand for year 2014 using exponential smoothing.The actual demand in year 2013 was 120.The forecast demand in year 2013 was 110.Using this data and a smoothing constant alpha of 0.1,which of the following is the resulting year 2014 forecast value?

The weighted moving average forecasting model uses a weighting scheme to modify the effects of individual data points.This is its major advantage over the simple moving average model.

In most cases,demand for products or services can be broken down into several components.Which of the following is not considered a component of demand?

Distinguish between strategic and tactical forecasts.

Given a prior forecast demand value of 230,a related actual demand value of 250,and a smoothing constant alpha of 0.1,what is the exponential smoothing forecast value for the following period?

Which of the following forecasting methods uses executive judgment as its primary component for forecasting?

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

A company has had actual unit demand for four consecutive years of 100,110,125,and 150.The respective forecasts using exponential smoothing were 120 for each of those four years.What value of alpha,the smoothing constant,was the firm using? ____________________________________

A company has calculated its running sum of forecast errors to be 500 and its mean absolute deviation is exactly 35.Which of the following is the company's tracking signal?

Decomposition of a time series means identifying and separating the time series data into its components.

A company has a MAD of 10.Its wants to have a 99.7 percent control limits on its forecasting system.It's most recent tracking signal value is 3.1.What can the company conclude from this information?

Experience and trial and error are the simplest ways to choose weights for the weighted moving average forecasting model.

A company wants to forecast demand using the simple moving average.If the company uses three prior yearly sales values ,which of the following is the simple moving average forecast for year 2014?

In general,which forecasting time frame is best to detect general trends?