Q#81: 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?
(A) 40,450
(B) 40,600
(C) 42,100
(D) 42,250
(E) 42,400
Answer: (C) 42,100
Q#82: In trend-adjusted exponential smoothing, the trend adjusted forecast (TAF) consists of:
(A) an exponentially smoothed forecast and a smoothed trend factor
(B) an exponentially smoothed forecast and an estimated trend value
(C) the old forecast adjusted by a trend factor
(D) the old forecast and a smoothed trend factor
(E) a moving average and a trend factor
Answer: (A) an exponentially smoothed forecast and a smoothed trend factor
Q#83: In the “additive” model for seasonality, seasonality is expressed as a ______ adjustment to the average; in the multiplicative model, seasonality is expressed as a ______ adjustment to the average.
(A) quantity, percentage
(B) percentage, quantity
(C) quantity, quantity
(D) percentage, percentage
(E) qualitative, quantitative
Answer: (A) quantity, percentage
Q#84: Which technique is used in computing seasonal relatives?
(A) double smoothing
(B) Delphi
(C) Mean Squared Error (MSE)
(D) centered moving average
(E) exponential smoothing
Answer: (D) centered moving average
Q#85: A persistent tendency for forecasts to be greater than or less than the actual values is called:
(A) bias
(B) tracking
(C) control charting
(D) positive correlation
(E) linear regression
Answer: (A) bias
Q#86: Which of the following might be used to indicate the cyclical component of a forecast?
(A) leading variable
(B) Mean Squared Error (MSE)
(C) Delphi technique
(D) exponential smoothing
(E) Mean Absolute Deviation (MAD)
Answer: (A) leading variable
Q#87: The primary method for associative forecasting is:
(A) sensitivity analysis
(B) regression analysis
(C) simple moving averages
(D) centered moving averages
(E) exponential smoothing
Answer: (B) regression analysis
Q#88: Which term most closely relates to associative forecasting techniques?
(A) time series data
(B) expert opinions
(C) Delphi technique
(D) consumer survey
(E) predictor variables
Answer: (E) predictor variables
Q#89: Which of the following corresponds to the predictor variable in simple linear regression?
(A) regression coefficient
(B) dependent variable
(C) independent variable
(D) predicted variable
(E) demand coefficient
Answer: (C) independent variable
Q#90: The mean absolute deviation (MAD) is used to:
(A) estimate the trend line
(B) eliminate forecast errors
(C) measure forecast accuracy
(D) seasonally adjust the forecast
(E) all of the above
Answer: (C) measure forecast accuracy
Q#91: Given forecast errors of 4, 8, and -3, what is the mean absolute deviation?
(A) 4
(B) 3
(C) 5
(D) 6
(E) 12
Answer: (C) 5
Q#92: Given forecast errors of 5, 0, -4, and 3, what is the mean absolute deviation?
(A) 4
(B) 3
(C) 2.5
(D) 2
(E) 1
Answer: (B) 3
Q#93: Given forecast errors of 5, 0, -4, and 3, what is the bias?
(A) -4
(B) 4
(C) 5
(D) 12
(E) 6
Answer: (B) 4
Q#94: Which of the following is used for constructing a control chart?
(A) mean absolute deviation (MAD)
(B) mean squared error (MSE)
(C) tracking signal (TS)
(D) bias
(E) none of the above
Answer: (B) mean squared error (MSE)
Q#95: The two most important factors in choosing a forecasting technique are:
(A) cost and time horizon
(B) accuracy and time horizon
(C) cost and accuracy
(D) quantity and quality
(E) objective and subjective components
Answer: (B) accuracy and time horizon
Q#96: The degree of management involvement in short range forecasts is:
(A) none
(B) low
(C) moderate
(D) high
(E) total
Answer: (B) low
Q#97: Which of the following is not necessarily an element of a good forecast?
(A) estimate of accuracy
(B) timeliness
(C) meaningful units
(D) low cost
(E) written
Answer: (D) low cost
Q#98: Current information on _________ can have a significant impact on forecast accuracy:
(A) prices
(B) promotion
(C) inventory
(D) competition
(E) all of the above
Answer: (E) all of the above
Q#99: A managerial approach toward forecasting which seeks to actively influence demand is:
(A) reactive
(B) proactive
(C) influential
(D) protracted
(E) retroactive
Answer: (B) proactive
Q#100: Customer service levels can be improved by better:
(A) mission statements
(B) control charting
(C) short term forecast accuracy
(D) exponential smoothing
(E) customer selection
Answer: (C) short term forecast accuracy