QUIZ QUESTION DEOM 330 (OPERATION MANAGEMENT)

CHAPTER 4

1. The forecasting time horizon that would typically 7. With regard to a regression-based forecast, the
be easiest to predict for would be the standard error of the estimate gives a measure of

a. intermediate range. a. the variability around the regression line.

b. long-range. b. the time period for which the forecast is
c. medium-range. valid.
d. short-range. c. the time required to derive the forecast
equation.
2. A forecast that projects a company's sales is a(n): d. the maximum error of the forecast.
a. economic forecast. 8. When using exponential smoothing, the
b. technological forecast.
smoothing constant
c. demand forecast.
d. associative model. a. is typically between .75 and .95 for most
business applications.
3. Quantitative methods of forecasting include b. indicates the accuracy of the previous
a. consumer market survey. forecast.
b. sales force composite. c. can be determined using MAD.
c. exponential smoothing. d. should be chosen to maximize positive bias.
d. jury of executive opinion. 9. A tracking signal
4. The method that considers several variables that a. cannot be used with exponential smoothing.
are related to the variable being predicted is b. is computed as the mean absolute deviation
a. multiple regression. (MAD) divided by the running sum of the
b. weighted moving average. forecast errors (RSFE).
c. exponential smoothing. c. that is negative indicates that demand is
greater than the forecast.
5. The forecasting model that is based upon d. must be either 1, 0, or -1 for the first
salesperson's estimates of expected sales is predicted value

a. sales force composite. 10. If demand is 106 during January, 120 in February,
b. consumer market survey. 134 in March, and 142 in April, what is the 3-month
c. delphi method. simple moving average for May?
d. jury of executive opinion.
a. 132
6. Decomposing a time series refers to breaking b. 126
down past data into the components of c. 142
d. 138
a. constants and variations.
b. trends, cycles, seasonal and random
variations.
c. long-term, short-term, and medium-term
variations.
d. strategy, tactical, and operational variations.
 QUIZ QUESTION DEOM 330 (OPERATION MANAGEMENT)
CHAPTER 4

11. Given last period's forecast of 65, and last 15. Time series patterns that repeat themselves
period's demand of 62, what is the simple after a period of days or weeks are called
exponential smoothing forecast with an alpha of 0.4
for the next period? a. seasonality.
b. trend.
a. 65 c. random variation.
b. 63.2 d. cycles.
c. 63.8
16. Which of the following is NOT a time-series
d. 62
model?
12. A forecasting technique consistently produces a
a. exponential smoothing
negative tracking signal. This means that
b. moving averages
a. the forecast technique consistently over c. linear regression
predicts. d. naïve approach
b. the MAPE will also consistently be negative.
c. the MSE will also consistently be negative. 17. The larger the n in a moving average forecast,
d. the forecasting technique consistently under the more sensitive it is to real changes in the data.
predicts. o True
13. A regression model is used to forecast sales o False
based on advertising dollars spent. The regression 18. If forecasting model A has a higher MSE than
line is y=500+35x and the coefficient of forecasting model B, then model A is more accurate
determination is .90. Which is the best statement than model B.
about this forecasting model?
o True
a. The correlation between sales and o False
advertising is positive.
b. The coefficient of correlation between sales 19. The slope in a trend projection equation
and advertising is 0.81. represents the value of the dependent variable
c. For every $35 spent on advertising, sales when time is equivalent to zero.
increase by $1.
o True
d. Even if no money is spent on advertising, the
o False
company realizes $35 of sales.
20. Due to a typo, Jim uses a linear trend equation
14. Linear regression is most similar to
with a value for b of 25 instead of the value 15 that
a. the weighted moving average method of should be used. The tracking signal computed on a
forecasting. series of forecasts made using this model will be
b. the trend projection method of forecasting. positive.
c. the naïve method of forecasting.
o True
d. the simple moving average method of
o False
forecasting.