Marketing 372 Ch. 8 Revision

Which of the following values of the correlation coefficient implies that the value of the dependent variable decreases as the value of the independent variable increases?

-.2

The following correlation coefficient values come from five different linear regression models. Which model “fits” the data the best?

-1

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What is a tracking signal used for?

To identify forecast bias

Suppose that Sally’s company uses exponential smoothing to make forecasts. Further suppose that last period’s demand forecast was for 20,000 units and last period’s actual demand was 21,000 units. Sally’s company uses a smoothing constant (α) equal to 40%. What should be the forecast for this period?

20,400

Suppose that Jane’s company uses exponential smoothing to make forecasts. Further suppose that last period’s demand forecast was for 500 units and last period’s actual demand was 480 units. In addition, yesterday Jane found out that this period’s actual demand will be for 550 units. Jane’s company uses an α value of .20. Today, Jane’s boss asked her to prepare a forecast for this period. What should that forecast be?

510

A firm has the following order history over the last 6 months.
January 120
February 95
March 100
April 75
May 100
June 50
What would be a 3-month weighted moving average forecast for July, using weights of 40% for the most recent month, 30% for the month preceding the most recent month, and 30% for the month preceding that one?

72.5

What is the mean absolute deviation of the following forecasts?
Month Actual Sales Forecast
Jan. 614 600
Feb. 480 480
Mar. 500 550
Apr. 500 600

41

What is the mean absolute deviation and mean squared error of the following forecast
Day Sales Sale Forecast
24 37
31 41
27 46
29 47
25 50

17,316

When is exponential smoothing equivalent to the “naïve” approach to forecasting?

α = 1

Consider the demand data listed below. What is the 4-month moving average forecast for June?
Month Actual Demand
Jan. 10,000
Feb. 12,000
Mar. 24,000
Apr. 8,000
May 14,000

14,500

Suppose that you want to set up a 3-month weighted moving average forecasting system. You want the weights to be percentages (that add to 100%). Furthermore, you want weights for the most recent two months to be equal but you want each of those weights to be twice as large as the weight for the oldest month. What should the weight be for the oldest month?

20%

Given the following data, use exponential smoothing (α = .2) to develop a demand forecast for period 3. Assume the forecast for the initial period is 5. What is the forecast?
Period Demand
1 7
2 9

6.12

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Which of the following forecasting methods would be most accurate if demand were rapidly decreasing?

3-month moving average

Suppose that you are using the exponential smoothing forecasting method, and this period’s forecast (Ft) was 100% accurate (i.e., no error). If α = .5, which of the following is definitely true?

Next periods forecast equals this periods actual

A firm has had the following order history over the last 4 months:
November 140
December 80
January 100
February 150
What is the weighted moving average forecast for March, assuming a weight of 60% for the most recent month, 30% for the month preceding the most recent month, and 10% for the month preceding that one?

128.00

What is the mean absolute deviation of the following forecasts?
Month Actual Sales Forecast
January 68 60
February 48 50
March 50 60
April 30 30

5

What is the mean squared error of the following forecasts?
Month Actual Sales Forecast
Jan. 614 600
Feb. 480 480
Mar. 500 450
Apr. 500 600

3174

What is the mean squared error of the following forecasts?
Month Actual Sales Forecast
Jan. 68 60
Feb. 48 50
Mar. 50 60
Apr. 30 30

42

Suppose that you are using exponential smoothing with α = 0.5 and your initial forecast 5 months ago was for 100 units. If the actual demand last month was 0 units, which of the following is definitely true?

We need more information to determine this month’s forecast

Suppose that you are using the four-period simple moving average method to forecast sales, and sales have been increasing by 20% every period. How will your forecasts perform?

Forecasts will be lower than actual

Suppose that you are using the four-period simple moving average method to forecast sales, and sales have been increasing by 40% every period. How will your forecasts perform?

Forecasts will be increasing by 40.0% every period

Suppose that you are using the naïve forecasting method with trend to forecast sales. If sales have been increasing by 40% per month, and this month’s sales amounted to $1200, what would your forecast be for next month?

1680

Suppose that you are using the naïve forecasting method with trend to forecast sales. Sales have been increasing by 10% per week. Two weeks ago, sales amounted to $100. What should your forecast be for this week?

121

Suppose that you are using the simple mean to make a forecast. This period’s forecast was equal to 200 units, and it was based on 5 periods of demand. This period’s actual demand was 300 units. What is your forecast for next period?

217

Suppose that you are using the simple mean to make a forecast. This period’s forecast was equal to 1000 units, and it was based on 99 periods of demand. This period’s actual demand was 0 units. What is your forecast for next period?

990

A firm has the following order history over the last 6 months.
January 120
February 95
March 100
April 75
May 100
June 50

81.25

Which of the following is not a step in Forecasting Seasonality?

Divide this year’s average seasonal demand by each average seasonal index

Given the following data, use exponential smoothing (α = .1) to develop a demand forecast for period 3. Assume the forecast for the initial period is 500. What is the forecast?
Period Demand
1 600
2 200

479

Which of the following is the simplest forecasting method?

Naïve

Which of the following would not be a consideration for selecting a forecasting software package?

Does the supplier support a local conference?

Combined forecasting involves a rule that

the forecasting methods should be different

Which of the following is not typically done jointly by CPFR trading partners?

raise capital

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____________________ is a collaborative process between two trading partners that establishes formal guidelines for joint forecasting and planning.

Collaborative Planning Forecasting and Replenishment (CPFR)

“Inside information” is most likely garnered through which of the following forecasting methods?

Delphi

Which of the following is not one of the nine steps utilized in the most complete form of CPFR?

create separate business plans