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Exam 4: Forecasting

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Question 1

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As compared to long-range forecasts, short-range forecasts:

A) are less accurate.
B) deal with less comprehensive issues supporting management decisions.
C) employ similar methodologies.
D) all of these
E) none of these

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

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Question 2

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A time-series model uses a series of past data points to make the forecast.

A) True
B) False

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Question 3

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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 ________.

What is the key difference between weighted moving average and simple moving average approaches to forecasting?

Distinguish a dependent variable from an independent variable.

A time-series trend equation is 25.3 + 21x. What is your forecast for period 7?

________ forecasts employ one or more mathematical models that rely on historical data and/or associative variables to forecast demand.

Which of the following statements comparing exponential smoothing to the weighted moving average technique is TRUE?

A seasonal index for a monthly series is about to be calculated on the basis of three years' accumulation of data. The three previous July values were 110, 150, and 130. The average demand over all months during the three-year time period was 190. What is the approximate seasonal index for July?

Which of the following most requires long-range forecasting (as opposed to short-range or medium-range forecasting) for its planning purposes?

The smoothing constant is a weighting factor used in ________.

What are the differences between quantitative and qualitative forecasting methods?

Favors Distribution Company purchases small imported trinkets in bulk, packages them, and sells them to retail stores. The managers are conducting an inventory control study of all their items. The following data are for one such item, which is not seasonal. (a) Use a trend projection to estimate the relationship between time and sales (state the equation). (b) Calculate forecasts for the first four months of the next year.

If a forecast is consistently greater than (or less than) actual values, the forecast is said to be biased.

Suppose that the demand in period 1 was 7 units and the demand in period 2 was 9 units. Assume that the forecast for period 1 was for 5 units. If the firm uses exponential smoothing with an alpha value of .20, what should be the forecast for period 3? (Round answers to two decimal places.)

Name and discuss three qualitative forecasting methods.

Which of the following is NOT a step in the forecasting process?

In time series, which of the following CANNOT be predicted?

A restaurant has tracked the number of meals served at lunch over the last four weeks. The data show little in terms of trends, but do display substantial variation by day of the week. Use the following information to determine the seasonal (daily) indices for this restaurant. Round all numbers in your calculations to four decimal places.

Very few forecasting techniques assume that there is some underlying stability in the system.