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Exam 14: Forecasting

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Question 41

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Which one of the following statements about forecasting is FALSE?

A) Causal methods of forecasting use historical data on independent variables (promotional campaigns,competitors' actions,etc. ) to predict demand.
B) Three general types of forecasting techniques are used for demand forecasting: time-series analysis,causal methods,and judgment methods.
C) Time series express the relationship between the factor to be forecast and related factors such as promotional campaigns,economic conditions,and competitor actions.
D) A time series is a list of repeated observations of a phenomenon,such as demand,arranged in the order in which they actually occurred.

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Question 42

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Table 14.6 -Use the information in Table 14.6.Calculate the exponential smoothing forecast for week 5 using α= 0.10 and F4 = 410.

A) fewer than or equal to 400
B) greater than 400 but fewer than or equal to 408
C) greater than 408 but fewer than or equal to 416
D) greater than 416

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Question 43

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________ is the difference found by subtracting the forecast from actual demand for a given period.

Table 14.10 TOMBOW is a small manufacturer of pencils and has had the following sales record for the most recent five months: Use an exponential smoothing model to forecast sales in months 2,3,4,and 5.Let the smoothing parameter equal 0.6;select F1 = 150 to get the forecast started. -Use the information in Table 14.10.What is the MAD for months 2 through 5?

The trend projection with regression model is highly adaptive.

Table 14.7 -Use the information in Table 14.7.Use the three-month moving-average method to forecast sales for June.

Which word best describes forecasting?

Table 14.4 The Furniture Super Mart is a furniture retailer in Evansville,Indiana.The Marketing Manager wants to prepare a media budget based on the next quarter's business plan.The manager wants to decide the mix of radio advertising and newspaper advertising needed to generate varying levels of Weekly Gross Revenue.The manager has collected data for the past five weeks,and has recorded the following average Weekly Gross Revenues and expenditures for Weekly Radio (X1) and Newspaper (X2) advertising: The Manager uses the multiple regression model in OM Explorer and obtains the following results: -Use the information provided in Table 14.4.What is the estimated Weekly Gross Revenue if $7,000 is spent on Radio Advertising (X1) and $4,000 is spent on Newspaper Advertising (X2) ?

Table 14.12 The management of an insurance company monitors the number of mistakes made by telephone service representatives for a company they have subcontracted with.The number of mistakes for the past several months appears in this table along with forecasts for errors made with three different forecasting techniques.The column labeled Exponential was created using exponential smoothing with an alpha of 0.30.The column labeled MA is forecast using a moving average of three periods.The column labeled WMA uses a 3-month weighted moving average with weights of 0.65,0.25,and 0.10 for the most-to-least recent months. -Using Table 14.12,what is the mean absolute percent error for months 6-10 using the exponential smoothing forecasts?

Better forecasting processes yield better forecasts.

Why are forecasts for product families typically more accurate than forecasts for the individual items within a product family?

Aggregation is the act of clustering several similar products or services.

Table 14.12 The management of an insurance company monitors the number of mistakes made by telephone service representatives for a company they have subcontracted with.The number of mistakes for the past several months appears in this table along with forecasts for errors made with three different forecasting techniques.The column labeled Exponential was created using exponential smoothing with an alpha of 0.30.The column labeled MA is forecast using a moving average of three periods.The column labeled WMA uses a 3-month weighted moving average with weights of 0.65,0.25,and 0.10 for the most-to-least recent months. -Using Table 14.12,what is the order of the forecasting techniques from most accurate to least accurate based on their errors for months 6-10?

Table 14.2 A textbook publisher for books used in business schools believes that the number of books sold is related to the number of campus visits to decision makers made by their sales force.A sampling of the number of sales calls made and the number of books sold is shown in the following table. -Use the information provided in Table 14.2.If a sales representative makes 55 sales calls,the number of book sales the publisher should expect is:

Table 14.4 The Furniture Super Mart is a furniture retailer in Evansville,Indiana.The Marketing Manager wants to prepare a media budget based on the next quarter's business plan.The manager wants to decide the mix of radio advertising and newspaper advertising needed to generate varying levels of Weekly Gross Revenue.The manager has collected data for the past five weeks,and has recorded the following average Weekly Gross Revenues and expenditures for Weekly Radio (X1) and Newspaper (X2) advertising: The Manager uses the multiple regression model in OM Explorer and obtains the following results: -Use the information provided in Table 14.4.Adding $1,000 of Weekly Newspaper Advertising (X2) can be expected to increase Weekly Gross Revenues by what amount? (Assume all other variables are held constant. )

Using salesforce estimates for forecasting has the advantage that:

Table 14.12 The management of an insurance company monitors the number of mistakes made by telephone service representatives for a company they have subcontracted with.The number of mistakes for the past several months appears in this table along with forecasts for errors made with three different forecasting techniques.The column labeled Exponential was created using exponential smoothing with an alpha of 0.30.The column labeled MA is forecast using a moving average of three periods.The column labeled WMA uses a 3-month weighted moving average with weights of 0.65,0.25,and 0.10 for the most-to-least recent months. -Using Table 14.12,what is the tracking signal for months 6-10 using the exponential smoothing forecasts?

Table 14.4 The Furniture Super Mart is a furniture retailer in Evansville,Indiana.The Marketing Manager wants to prepare a media budget based on the next quarter's business plan.The manager wants to decide the mix of radio advertising and newspaper advertising needed to generate varying levels of Weekly Gross Revenue.The manager has collected data for the past five weeks,and has recorded the following average Weekly Gross Revenues and expenditures for Weekly Radio (X1) and Newspaper (X2) advertising: The Manager uses the multiple regression model in OM Explorer and obtains the following results: -Use the information provided in Table 14.4.What amount of Weekly Gross Revenue can be expected for a week in which no radio or newspaper advertising is purchased? (Assume all other variables are held constant. )

________ analysis is a statistical approach that relies heavily on historical demand data to project the future size of demand,and it recognizes trends and seasonal patterns.

Table 14.11 A sales manager wants to forecast monthly sales of the machines the company makes using the following monthly sales data. -Use the information in Table 14.11.Forecast the monthly sales of the machine for month 9,using the three-month moving-average method.