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Exam 4: Forecasting

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Question 41

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In a regression equation where y-hat is demand and x is advertising, a coefficient of determination (R²) of .70 means that 70% of the variance in advertising is explained by demand.

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B) False

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Question 42

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Explain, in your own words, the meaning of the coefficient of determination.

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The coefficient of determinati...

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Question 43

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________ forecasts use a series of past data points to make a forecast.

Give an example, other than a restaurant or other food-service firm, of an organization that experiences an hourly seasonal pattern. (That is, each hour of the day has a pattern that tends to repeat day after day.) Explain.

The last four weekly values of sales were 80, 100, 105, and 90 units, respectively. The last four forecasts (for the same four weeks) were 60, 80, 95, and 75 units, respectively. Calculate the MAD, MSE, and MAPE for these four weeks.

Arnold Tofu owns and operates a chain of 12 vegetable protein "hamburger" restaurants in northern Louisiana. Sales figures and advertising expenses for the stores are provided in the table below. Sales are given in millions of dollars; advertising expenses are in tens of thousands of dollars. Calculate a regression line for the data. What is your forecast of sales for a store with advertising spending of $240,000? $300,000?

Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast?

Identify the seven steps involved in forecasting.

Which of the following is TRUE regarding the two smoothing constants of the Forecast Including Trend (FIT) model?

Which time-series model below assumes that demand in the next period will be equal to the most recent period's demand?

The larger the number of periods in the simple moving average forecasting method, the greater the method's responsiveness to changes in demand.

The tracking signal is the:

An innovative restaurateur owns and operates a dozen "Ultimate Low-Carb" restaurants in northern Arkansas. His signature item is a cheese-encrusted beef medallion wrapped in lettuce. Sales (x, in millions of dollars) are related to Profits (y-hat, in hundreds of thousands of dollars) by the regression equation y-hat = 7.21 + 1.76 x. What is your forecast of profit for a store with sales of $10 million? $30 million?

Suppose that the last four months of sales were 8, 10, 15, and 9 units, respectively. Suppose further that the last four forecasts were 5, 6, 11, and 12 units, respectively. What is the Mean Absolute Deviation (MAD) of these forecasts?

Demand forecasts serve as inputs to financial, marketing, and personnel planning.

The three major types of forecasts used by organizations in planning future operations are:

The ________ measures the strength of the relationship between two variables.

Identify four quantitative forecasting methods.

When one constant is used to smooth the forecast average and a second constant is used to smooth the trend, the forecasting method is ________.

The two general approaches to forecasting are: