Topic 6: Forecasting

Multiple Choice

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This activity contains 15 questions.

Question 1.

A repeatable pattern of increases or decreases in demand, depending on periods of time of one year
or less, is a time series pattern called:

A. Trend
B. Cyclical
C. Seasonal
D. Random

Question 2.

The least predictable pattern of time series variation is called:

Trend

Seasonal

Horizontal

Random

Question 3.

The ability to make intelligent long-range forecasts depends on accurate estimates of

______________ patterns.

Random

Seasonal

Cyclical

Trend
Question 4.

When deciding what to forecast, which of the following factors are key to an accurate forecast?

A. Value of product or service

B. Level of aggregation
C. Units of measurement
D. Both b and c

Question 5.

Quantitative forecasting techniques include:

A. Delphi method
B. Exponential smoothing
C. Manager opinions
D. Consumer surveys

Question 6.

The change in direction in the pattern of residential building permits may serve as an indicator of
which type of demand pattern?

A. Seasonal
B. Trend
C. Cyclical
D. None of the above
Question 7.

Which of the following are valid configurations of multiple forecasting techniques?

A. Average of independent forecasts based on different methods or data.

B. Multiple, parallel techniques with the least error-producing technique used for the next
forecast
C. Quantitative methods with judgment method review
D. All of the above

Question 8.

Time series analysis is most effective when used in _______ term forecasts.

A. Indefinite
B. Short
C. Long
D. Medium

Question 9.

Long term is the time horizons used for which of the following decisions?

A. Master production planning

B. Facility location
C. Inventory management
D. Staff planning

Question 10.

Judgment methods are least likely to be indicated in which of the following situations?

A. A new product is being introduced

B. The Delphi method is necessary
C. The underlying product technology is in transition
D. Short-term forecasts of a product with stable demand
Question 11.

Data on the weekly sales of room air conditioning units were matched with the average temperature
and calculations produced sample correlation coefficients, r, in the range of -–0.75 and –0.83. Which
of the following statements best express a conclusion that may be drawn from the values of “r”?

A. Cannot be determined from the information given

B. There is no relationship between temperature and sales
C. As the temperature increases, the number of room air conditioners sold decreases
D. As the temperature decreases, the number of room air conditioners sold decreases.

Question 12.

Dave’s Bar-B-Q operated a mobile kitchen that serviced construction sites, office buildings, and
public parks. Beginning in June, snow cones were added to the menu. The weekly sales figures for
the previous year are given below. Assuming a weighting of 3,2,1, determine the three-period
weighted moving average forecast for the second week in July.

WEEK June

1 2 3 4 July

1 2 3 4 5 Aug

1 2 3 4

SALES 4 6 4 5 10 8 7 9 12 14 16

Open Hint for Question 12 in a new window.

5.3

8.2

6.3

7.3

Question 13.

Linear regression was used to develop the slope and intercept values for a forecast equation in Y
(sales volume) and X (customer traffic) using the data below (sales in million dollars; customers in
thousands). Forecast the sales volume when the customer level is 22. a = –0.158; b = 0.131

CUSTOMERS(X) 10 12 16 15 14 17 20
SALE VOLUME(Y) 1.0 1.4 1.9 2.0 1.8 2.1 2.3

Open Hint for Question 13 in a new window.

2.30

2.06

2.72

2.46

End of Question 13

Question 14.

Dave’s Bar-B-Q operated a mobile kitchen that serviced construction sites, office buildings, and
public parks. Beginning in June, snow cones were added to the menu. The weekly sales figures for
the previous year are given below. Use exponential smoothing, a smoothing coefficient of 0.3, to
forecast demand for the third week of June.

WEEK June 1 2 3 4

SALES 4 6 4 5

FORECAST Alpha=3.0 5.0 4.7

4.7

4.0

6.4

5.1
Question 15.

Forecasts of time series patterns that display regularly repeating upward or downward movements
in demand measured in periods of less than one year (hours, days, weeks, months, or quarters) are
accomplished by which of the following methods.

A. Naive method
B. Exponential smoothing with trend method
C. Delphi method
D. Multiplicative seasonal method