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Exam 4: Forecasting

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Question 1

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

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Simple moving averages are useful where ...

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Question 2

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The last four months of sales were 8, 10, 15, and 9 units. The last four forecasts were 5, 6, 11, and 12 units. The Mean Absolute Deviation (MAD) is

A) 2
B) -10
C) 3.5
D) 9
E) 10.5

F) C) and E)
G) None of the above

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Question 3

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Distinguish between a moving average model and an exponential smoothing model.

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

Time-series data may exhibit which of the following behaviors?

A trend projection equation with a slope of 0.78 means that there is a 0.78 unit rise in Y for every unit of time that passes.

In trend projection, the trend component is the slope of the regression equation.

Technological forecasts address the business cycle by predicting inflation rates, money supplies, housing starts, and other planning indicators.

John's House of Pancakes uses a weighted moving average method to forecast pancake sales. It assigns a weight of 5 to the previous month's demand, 3 to demand two months ago, and 1 to demand three months ago. If sales amounted to 1000 pancakes in May, 2200 pancakes in June, and 3000 pancakes in July, what should be the forecast for August?

What are the realities of forecasting that companies face?

What are the differences between quantitative and qualitative forecasting methods?

The last four weekly values of sales were 80, 100, 105, and 90 units. The last four forecasts were 60, 80, 95, and 75 units. These forecasts illustrate

Use exponential smoothing with trend adjustment to forecast deliveries for period 10. Let alpha = 0.4, beta = 0.2, and let the initial trend value be 4 and the initial forecast be 200. $\begin{array} { | c | c | } \hline &\text { Actual }\\\underline { \text { Period } } & \underline { \text { Detual } } \\\hline 1 & 200 \\\hline 2 & 212 \\\hline 3 & 214 \\\hline 4 & 222 \\\hline 5 & 236 \\\hline 6 & 221 \\\hline 7 & 240 \\\hline 8 & 244 \\\hline 9 & 250 \\\hline 10 & 266 \\\hline\end{array}$

The two general approaches to forecasting are

The forecasting time horizon and the forecasting techniques used tend to vary over the life cycle of a product.

Forecasts are usually classified by time horizon into three categories

A naïve forecast for September sales of a product would be equal to the forecast for August.

Which of the following is not present in a time series?

Which time-series model uses past forecasts and past demand data to generate a new forecast?

Demand cycles for individual products can be driven by product life cycles.