Module 1 - Section D

Demand forecasts are likely to be most accurate for which of the following items?

All cars (correct)

All full-size cars

All hybrid models

All SUV models

Basing a demand forecast for major kitchen appliances on housing start data is an example of which of the following?

Time-series forecasting

Exponential forecasting

Expert judgment forecasting

Associative forecasting (correct)

Which of the following statements correctly identifies the purpose of the weights in a weighted moving average?

To be more sensitive to recent trends in demand (correct)

To put more emphasis on long-term influences on demand

To make data gathering and forecasting calculations simpler

To take account of mean average deviation

company wants to calculate the tracking signal for a certain product. Over a 4-month period, the forecast errors were 0.87, 1.38, -1.48, and -1.36. The resulting MAD is 1.27 units. What is the tracking signal?

-0.46 Signup and view all the answers

A statistical forecast should be:

one of many inputs to demand plans. Signup and view all the answers

If an organization has the following sales and forecasting results over a three-month period, what is the mean squared error? (Assume a smoothing constant of 0.3 and exponential forecast rounding to the nearest whole unit.) • April: Actual sales of 20 units, exponential forecast of 18 units • May: Actual sales of 16 units, exponential forecast of 19 units • June: Actual sales of 15 units, exponential forecast of 18 units

7.3 Signup and view all the answers

Which of the following conditions contributes to the supply chain phenomenon known as the bullwhip effect?

Inaccurate demand forecasting Signup and view all the answers

For a three-month period, the forecast for demand for each month was 184.2, 178.6, and 170.5 units respectively. For the same period, the demand was 192, 187, and 195 units. What is the cumulative forecast error?

40.7 units Signup and view all the answers

For an innovative product introduction at a new organization, which of the following would provide the best guidance for how many items to produce initially?

Expert opinion guided by purchased customer data Signup and view all the answers

Which of the following forms the basis for a naive demand forecast?

Data from the last demand period Signup and view all the answers

A demand forecast determined by a panel of all the salespeople in an organization may reach an exaggerated, false conclusion due to which of the following situations?

Groupthink effect Signup and view all the answers

For one product, one standard deviation (SD) in units equals 3.5 units. A 99.50 percent customer service level is desired. This is a safety factor of 2.57 for SD or of 3.20 for mean absolute deviation. How many units should the organization hold in safety stock (round up)?

9 units Signup and view all the answers

An organization forecasts demand for a given month to be 148.86 units. Actual demand is 176 units. What is the forecast accuracy expressed as a percentage?

84.6% Signup and view all the answers

Which of the following is a situation in which an exponential smoothing technique should have its smoothing constant reevaluated?

Bias due to a worse effect from recession than expected Signup and view all the answers

What are time-series models used in?

Quantitative forecasting Signup and view all the answers

Which of the following statements identifies a beneficial result of including more periods in a moving average?

The impact of random variations is reduced. Signup and view all the answers

The sum of the demand for an item for the past 12 months is 960 units. The demand in May for the past three years was 92 units, 91 units, and 99 units. What is the seasonal index for May?

1.175 Signup and view all the answers