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Chapter 11 - Forecasting
11-1
1. A qualitative forecast would most likely be used for:
Difficulty: Easy
2. A regression model is an example of which type of forecasting method?
Difficulty: Easy
3. When should qualitative methods NOT be used?
Difficulty: Easy
4. A small company that manufactures rubber boots is selecting a method to forecast demand
for the next 10 years. The company recently expanded its facilities, doubling its capacity.
Which of the following forecasting methods would be preferred?
Difficulty: Moderate
Chapter 11 - Forecasting
11-2
5. The difference between actual demand and the forecast is:
Difficulty: Moderate
6. If a sales representative tells his or her manager, "I hope to sell 20% more than last year,"
this should be considered:
Difficulty: Easy
7. Using a three-week moving average, what is your forecast for week 6?
Difficulty: Moderate
Chapter 11 - Forecasting
11-3
8. What is the exponentially smoothed forecast for week 2? (Use F1 = 25 and alpha = 0.2)
Difficulty: Easy
9. What is the exponentially smoothed forecast for week 6? (Use F5 = 33 and alpha = 0.0)
Difficulty: Moderate
Chapter 11 - Forecasting
11-4
10. Given the following information for period 15, what will be the smoothed mean absolute
deviation for period 16?
Demand = 120
Forecast = 180
MAD15 = 50
Alpha = 0.3
Difficulty: Hard
11. The Grand Bakery produces 60 special sourdough rolls every day. Any rolls that are not
sold each day are given to the employees. They have collected sales data from the past week:
Day Rolls sold
1 50
2 50
3 48
4 60
5 53
6 60
What is the value of F6 if they use a 3-day weighted moving average with W1 = 0.6, W2 = 0.2,
and W3 = 0.2?
Difficulty: Easy
Chapter 11 - Forecasting
12. Using the data from question 11, calculate the forecast for period 7 using a four-period
moving average:
Difficulty: Easy
13. Which of the following is NOT a measure of forecast accuracy?
Difficulty: Moderate
14. Which phrase most closely describes the Delphi forecasting technique?
Difficulty: Moderate
15. Which of the following statements is/are true about time-series forecasting?
Chapter 11 - Forecasting
11-6
16. Using exponential smoothing, if we want forecasts to be very responsive to recent
demand, the value of alpha should be:
Difficulty: Moderate
17. The forecast was 70 units for the current period while actual demand was 76. The forecast
for the next period is 75.8. What is alpha if a simple exponential smoothing forecast method is
being used?
Difficulty: Hard
18. Forecast error is used for all of the following EXCEPT:
Difficulty: Hard
19. If one time-series model is used for forecasting a low demand item and another time-
series model is used for forecasting a high demand item, which measure of forecast accuracy
provides a valid comparison of the errors from these two time-series?
Difficulty: Moderate
Chapter 11 - Forecasting
11-7
20. A method of forecasting that best describes the flows from one sector of the economy to
another is called:
Difficulty: Moderate
21. Which of the following is NOT one of the most important factors in selecting a
forecasting method?
Difficulty: Moderate
22. _____ models are usually more accurate than ______ models for medium-to-long-range
forecasts.
Difficulty: Hard
23. Which of the following is NOT true about Collaborative Planning, Forecasting and
Replenishment (CPFR)?
Difficulty: Hard
Chapter 11 - Forecasting
11-8
24. Given the following weekly demand figures, what is the MAD at the end of week 5?
Difficulty: Moderate
25. All forecasts should include two estimates: An estimate of the demand and an estimate of
the forecasting error.
Difficulty: Easy
26. Quantitative forecasting methods should be used for predicting the demand patterns of
new products introduced in the market.
Difficulty: Hard
27. A time-series forecast model includes only a level (average) term, representing past
average demand.
Difficulty: Moderate
Chapter 11 - Forecasting
11-9
28. Tracking signal is the ratio between cumulative forecast error and the most recent estimate
of mean absolute deviation.
Difficulty: Easy
29. Simple exponential smoothing forecasts are reliable for forecasting long-term demand
patterns.
Difficulty: Moderate
Difficulty: Moderate
31. Forecasting of demand is always equivalent to forecasting of sales.
Difficulty: Moderate
32. United Colors of Benetton is facing a serious problem. The global fashion garment
manufacturer and retailer is well known for its speed of new product introduction. The firm is
planning to introduce its 2013 summer collection and wants to estimate demand. Demand
from past years are shown below.
Chapter 11 - Forecasting
11-10
Difficulty: Moderate
33. Describe each of the five demand components in a time-series (of past demand data).
Difficulty: Moderate
