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Questions and Answers
In a 4-month Simple Moving Average calculation, will adding an additional month of data always increase the average value?
In a 4-month Simple Moving Average calculation, will adding an additional month of data always increase the average value?
- Yes, it stabilizes the average value significantly.
- No, it will decrease the average value if data is low.
- No, it may not affect the average value. (correct)
- Yes, it always increases the average value.
Does Exponential Smoothing always give more weight to older data points?
Does Exponential Smoothing always give more weight to older data points?
- No, it focuses more on the most recent data points. (correct)
- Yes, it gives equal weight to all data points.
- No, it treats all data uniformly without preference.
- Yes, it exponentially decreases the weight of newer data.
What does capacity utilization represent?
What does capacity utilization represent?
- The efficiency of workforce productivity.
- The total output compared to expected demand.
- The maximum output achievable without breakdowns.
- The ratio of actual output to design capacity. (correct)
Is it possible for the average value in a Simple Moving Average to decrease when a new data point is added?
Is it possible for the average value in a Simple Moving Average to decrease when a new data point is added?
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Which statement about Exponential Smoothing is true?
Which statement about Exponential Smoothing is true?
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Study Notes
Simple Moving Average (SMA)
- Adding an additional month of data in a 4-month SMA does not always increase the average; it depends on the relationship between the new month's data and the previous average.
Exponential Smoothing
- Exponential smoothing does not give more weight to older data points; it assigns more weight to recent observations, enhancing the relevance of newer data in the forecast.
Capacity Utilization
- Capacity utilization measures the efficiency of production by calculating the ratio of actual output to the maximum possible (design) capacity, indicating how effectively resources are being utilized.
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