Chapter 3: Forecasting.

s e u l a v t . s d e n w a e m n e e d h s t a g h n i c u d s . d t a e s g y ? e a r b r g e n e d t i v e n t i t a s a f a e c d o h p e t r e l u g o b f s n i i a i t t t r u u s a o p a v b c m e a a r f o f e o o c o u f e s r r e t e e i u h n l s t i i . t l e a , v s i h v e e t t t l v n e c s b e r d l a e e a u n l d i t e m d s a u c u n a l e e r t f t v a c d s o a a n e u f e s a i t l h k n d s e c l r t t d . o n s g i m o o t i e e a n s u n o i i t e i c w v . c c o s f h e o w e e d r b e a t e b v b o n c d l a o d g a l o f e a t t n a r b . e o i e c t n e n f b o b a h p e a g f e o f t i e p d n n s e f e & t m h f t h o a a a c t g s r r o e t w c a u s n t a f d e f t t e c h a d a o n m s s o n r t t d e o l a a r u s h s r n l o o i t c c c o r b p n i A a a a d e e f r r o h l e l h o o F M b F W A d d d a S c c c

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a- the ability of the organization to meet future demands. b- an explanatory model or a subjective assessment of the influence on demand. d- an in advance plan of the consumption of financial and other resources. 2-

a- accounting and finance. b- human resources and marketing. c- operations and product/service design.

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assume causal system and rarely perfect because of randomness. have an accuracy that decreases as time horizon increases. none of the above.

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a- Forecast accuracy increases as time horizon increases. b- Forecasts are more accurate for individuals vs. groups. c- It is possible to correctly forecast real-world variable values on a regular basis. d-

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a- product lines and sales planning. b- capital expenditures and product groups. d- both a and b. 6-

a- machine capacities. b- purchasing. c- scheduling.

a- planning for new products. b- facility location or expansion. d- none of the above.
e b d l u o h s s s e c o r p g n i t s a c e r o f e h t n i p e t s t s r i f e h . b d n a a h t o b c

a- establishing a time horizon. b- determining the purpose of the forecast. c- monitoring the forecast.
. s r o r r e t s a c e r o f g n i
z

weighs errors according to their squared values. weighs all errors evenly. none of the above.
) D (

weighs errors according to their squared values. weights errors according to relative error. both a and c.
g n i t s a c e r o F e v i t a t i l a u

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a- consists mainly of subjective inputs. b- permits the inclusion of soft information. c- involve either the projection of historical data or the development of associative methods that attempt to use causal variables to make forecast. d-

11a

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9v

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a- gathering and analyzing data. b- selecting a forecasting technique. c- establishing a time horizon.

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L

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a c c

b- permit the inclusion of soft data. c- consists mainly of subjective inputs, which often defy precise numerical description. d- both a and b. 14- A forecast developed by a group of upper level managers a- is often used as a part of short-range planning. b- is never risky as no one opinion may prevail.
e r i t n e e h t r e v o t s a c e r . t o s f a e c h e r t r o f o f d y o t i o l i g b i a s e n c o u p d s o e r r p g o n i t s e u r f u f i s d s e t r a p h t s s y e t l i l i n i b i t s l s u o s p e r e y h t a o m t p s u d o a r e l g c

d- is not possible on planning a new product development.

t a h t s i s n o i n i p o e c r o f s e l a s n o d e s a b g n i t s a c e r o f f o s e g a t n a v d a e h t m o r F

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a- staff members are normally able to distinguish between what customers would like to do and what they actually will do. b- these people are not easily influenced by recent experiences. c- both a and b.
. e v o b a e h t f o e n o n d

a- can tap information that might not be available elsewhere. b- can be expensive and time consuming. cd- none of the above. 17- An IT iterative process in which managers and staff complete a series of questionnaires, each developed from the previous one, to achieve a consensus forecast is called the a- Associative method. b- Linear method. cd- Diffusion method.
? e s l a f s i s t n e m e t a t s g n i w o l l o f e h t f o h c i h . b d n a a h t o b

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a- Forecast based on time series data assume that future values of the time-series can be estimated from past values of the time-series.

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a- is often related to a variety of economic, political, or even agricultural conditions. bc- occurs due to unusual circumstances that do not reflect typical behavior. d- is a short-term upward or downward movements in data.
d e r e d i s n o c e r a s t n e v e r e h t a e w d n a s e k i r t s r u o b a n e e b e v a h s r o i v a h e b r e h t o l l a r e t f a s n i a m e r t a h t n o i t a i r a v . l r a o u f d i d s e t e r n u e o h c t c s i a

a- random variation. bc- seasonal variation. d- trend.

t s a c e r o F e v

a- stable time series data. b- seasonal variations. c- data with trends.

. e v o b a e h t f o l l a d

dont work well when a series tends to vary about an average. are tough variations in the data. cannot handle step changes or gradual changes in the level of a series.
. e u

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21a

is simple to use and virtually of no cost. has no data analysis. can be a standard for accuracy.

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b- Time-series is a time-ordered sequence of observations taken at regular time intervals. c- Restaurants, service call centers, and theatres all experience seasonal demand. de l e h t n i s e g n a h c l a u d a r g r o s e g n a h c p e t s e l d n a h t o n n a c s e u

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a- the fewer the data points used, the less responsive model it will be. b- the forecast is updated by adding the newest value as well as keeping the oldest. d- the number of data points included in the average doesnt affect the models sensitivity by any means.
, e g a r e v a g n i v o m d e t h g i e w e h t n
I

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a- the most recent values in a time series are given more weight in computing a forecast. b- the choice of weights, is somewhat arbitrary and involves some trial and error. c- there is a weighted averaging method that is based on the previous forecast plus a percentage of the forecast error.
. b d n a a h t o b d

ab- a weighted moving average. c- a simple moving average. d- a moving average.

? g n i t s a c e r o F s u c o F o t y l p p a t

a- It is based on a best current performance basis. b- Apply several forecasting methods to the last several periods of historical data. c- The method with the highest accuracy is used to make the forecast for the following period.
. y l l a u n n a d e t a e p e r s i s s e c o r p s i h
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a- Historical data on which to base a forecast are not available for new products. b- Predictions are based on rates of product adoption and usage spread from other established products. c- They take into account facts such as market potential and attention from mass media. d. l e d o m s i h t n i e l o r a y a l p t

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a- linear trend equation. bc- parabolic trend equation. d- exponential trend equation.
? e s l a f s i s t n e m e t a t s g n i w o l l o f e h t f o h c i h

c- The trend adjusted forecast consists of smoothed error and trend factor. d- Alpha and beta are smoothing constants.
s t n e v e g n i r r u c e r o t d e i t e b n a c t a h t s e u l a v s e i r e s n i s t n e m e v o m g n i t a e p e r y r o t a l u g e

a- random variations. b- associative variations. c- linear variations. df o s m r e t n i d e s s e r p

x

b- the ability to respond to changes in trend. c- the search for another variable that relates and leads to the variable of interest. d- its relation on the development of an equation that summarizes the effects of predictor variables.
s a d e s s e r p
x

a- a quantity that gets added or subtracted from the time-series average in order to incorporate seasonality. b- a percentage of the average amount which is then used to multiply the value of a series in order to incorporate seasonality.

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a- Slope and intercept can be estimated from historical data. b-

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a- linear. b- parabolic. c- exponential. do b a e h t f o l l a

n A

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d- none of the above.

o t d e s u e r a s e v i t a l e r l a n o s a e

a- Forecasting model was adjusted by the seasonal percentage used in the multiplicative seasonality. b- Seasonal relatives are used in order to get a clearer picture of the nonseasonal components of the data series. c- A widely used method for computing seasonal relatives involves the use of a centered moving average.
. n o i t a r u d r e t r o h s f o e r a t u b s n o i t a i r a v l a n o s a e s o t r a l i m i s e r a s e l c y

b- a long-term upward or downward movement in data. c- short-term regular variations related to the calendar or time of day. d- a variety of economic, political, or even agricultural conditions.
? n o i s s e r g e

a- The object of simple linear regression is to obtain an equation of a straight line that minimizes the sum of squared vertical deviations from the line. b- It is the most widely used form of regression. c- It involves a linear relationship between two variables.
. s e u l a v d e v r e s b o f o e g n a r e h t d n o y e b r o n i h t i w e d a m e r a s n o i t c i d e r
P

a- correlation. b- square of the correlation coefficient. d- predictor variable.

. e t a m i t s e r o r r e d r a d n a t s c

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a- project patterns identified in recent time-series observations. b- develop an equation that describes the relationship, enabling forecasts to be made. c- corporate seasonality in a forecast.

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a- the predictions using the linear equation will tend to be less accurate. c- it will not have any effect on the accuracy of the prediction. d- there will be a need for a considerable amount of data to be able to reach a prediction.
s i t n e i c i f f e o c e h . e t a r u c c a e r o m e b o t d n e t l l i w n o i t a u

b- a measure of the percentage of variability in the values that is explained by the independent variable. c- a measure of the scatter of points around a regression line. d- a measure of a percentage of the forecast error. 42- Correlation ranges between b- 0 and 1.00 c- 0.5 and 1.5 d- -0.5 and +0.5
, n o i s s e r g e r f o s h t g n e r t s e h t m o r F

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a- simple linear regression applies to linear relationships with any number of independent variable. b- you can establish a relationship with the minimal amount of data. c- not all observations are weighted equally. dp i h s n o i t a l e r r a e n i l a f o a t a d e h

b- the standard error of estimate. c- correlation coefficient.

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a- may be time-dependent if analysis of time series is used. b- may be time-dependent if time as an independent variable in a multiple regression analysis is used. c- can never be time-dependent.

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d- square of the correlation coefficient.

f d e l l a c s i s e u l a v l a u t c a n o a e h s t u s s e e h l t r e o r i r u e t

a- random variation. b- irregular variation. c- seasonal variation.

. s i s y l a n a n o i s s e r g e r e l p i t l u m d

a- the omission of an important variable. b- a change or shift in the variable that the model cannot deal with. c- appearance of a new variable.
. e v o b a e h t f o l l a d

a- severe weather or other natural phenomena. b- temporary shortages or breakdowns, catastrophes, or similar events. none of the above.
s i t r a h c l o r t n o c e h . b d n a a h t o b d c

ab- All patterns, such as trends or cycles, are present. c- There is detection of randomness in errors. d- Both a and b.
a e r g e b o t s t s a c e r o f r o f y c n e d n e t t n e t s i s r e p e h

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a- variation. b- correlation. cd- regression.

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ab- used to detect randomness in errors. c- a technique for fitting a line to a set of data points. d- a model that involves more than one predictor.

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o M

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a- cost and timing. bc- timing and historical data. d- historical data and computer software.
? e s l a f s i s t n e m e t a t s g n i w o l l o f e h t f o h c i h

55- The proactive approach generally requires a- an explanatory model. b- a subjective assessment of the influence on demand. cd- none of the above.
. b d n a a h t o b

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a- Advertising and pricing are considered proactive approaches. b- The reactive approach views forecast as probable future demand. cd- A spreadsheet approach is used on developing and revising forecasts.

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a- equals zero. b- positive. c- negative dn r . o e v i t i s o p

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