1) A medium-term forecast typically covers a two- to four-year time horizon.
2) Regression is always a superior forecasting method to exponential smoothing, so regression should be used whenever the appropriate software is available.
3) The three categories of forecasting models are time series, quantitative, and qualitative.
4) TIME SERIES models attempt to predict the future by using historical data.
5) TIME SERIES models rely on judgment in an attempt to incorporate qualitative or subjective factors into the forecasting model.
6) A moving average forecasting method is a causal forecasting method.
7) An exponential forecasting method is a TIME SERIES forecasting method.
8) A trend-projection forecasting method is a causal forecasting method.
9) Qualitative models produce forecasts that are a little better than simple guesses or coin tosses.
10) The most common quantitative causal model is regression analysis.
11) Qualitative models attempt to incorporate judgmental or subjective factors into the forecasting model.
12) A scatter diagram is useful to determine if a relationship exists between two variables.
13) The Delphi method solicits input from customers or potential customers regarding their future purchasing plans.
14) The naïve forecast for the next period is the actual value observed in the current period.
15) Mean absolute deviation (MAD) is simply the sum of forecast errors.
16) TIME SERIES models enable the forecaster to include specific representations of various qualitative and quantitative factors.
17) Four components of time series are trend, moving average, exponential smoothing, and seasonality.
18) The fewer the periods over which one takes a moving average, the more accurately the resulting forecast mirrors the actual data of the most recent time periods.
19) In a weighted moving average, the weights assigned must sum to 1.
20) A scatter diagram for a time series may be plotted on a two-dimensional graph with the horizontal axis representing the variable to be forecast (such as sales).
21) Scatter diagrams can be useful in spotting trends or cycles in data over time.
22) Exponential smoothing cannot be used for data with a trend.
23) In a second order exponential smoothing, a low ? gives less weight to more recent trends.
24) An advantage of exponential smoothing over a simple moving average is that exponential smoothing requires one to retain less data.
25) When the smoothing constant ? = 0, the exponential smoothing model is equivalent to the naïve forecasting model.
26) Multiple regression models use dummy variables to adjust for seasonal variations in an additive TIME SERIES model.
27) Multiple regression can be used to develop a multiplicative decomposition model.
28) A seasonal index must be between -1 and +1.
29) A seasonal index of 1 means that the season is average.
30) The process of isolating linear trend and seasonal factors to develop a more accurate forecast is called regression.
31) When the smoothing constant ? = 1, the exponential smoothing model is equivalent to the naïve forecasting model.
32) Multiple regression may be used to forecast both trend and seasonal components present in a time series.
33) Adaptive smoothing is analogous to exponential smoothing where the coefficients ? and ? are periodically updated to improve the forecast.
34) Bias is the average error of a forecast model.
35) Which of the following is not classified as a qualitative forecasting model?
A) exponential smoothing
B) Delphi method
C) jury of executive opinion
D) sales force composite
E) consumer market survey
36) A judgmental forecasting technique that uses decision makers, staff personnel, and respondent to determine a forecast is called
A) exponential smoothing.
B) the Delphi method.
C) jury of executive opinion.
D) sales force composite.
E) consumer market survey.
37) Which of the following is considered a causal method of forecasting?
A) exponential smoothing
B) moving average
C) Holt’s method
D) Delphi method
E) None of the above
38) A graphical plot with sales on the Y axis and time on the X axis is a
A) scatter diagram.
B) trend projection.
C) radar chart.
D) line graph.
E) bar chart.
39) Which of the following statements about scatter diagrams is true?
A) Time is always plotted on the y-axis.
B) It can depict the relationship among three variables simultaneously.
C) It is helpful when forecasting with qualitative data.
D) The variable to be forecasted is placed on the y-axis.
E) It is not a good tool for understanding TIME SERIES data.
40) Which of the following is a technique used to determine forecasting accuracy?
A) exponential smoothing
B) moving average
C) regression
D) Delphi method
E) mean absolute percent error