BUSINESS A MGT-514tif_ch14

BUSINESS A MGT-514tif_ch14 Operations Management: Processes and Supply Chains, 10e (Krajewski et al.) Chapter 14 Forecasting 1) The repeated observations of demand for a product or service in their order of occurrenc ...

BUSINESS A MGT-514tif_ch14 Operations Management: Processes and Supply Chains, 10e (Krajewski et al.) Chapter 14 Forecasting 1) The repeated observations of demand for a product or service in their order of occurrence form a pattern known as a time series. Answer: TRUE Reference: Demand Patterns Difficulty: Easy Keywords: time series, repeated observations 2) One of the basic time series patterns is random. Answer: TRUE Reference: Demand Patterns Difficulty: Easy Keywords: time series, pattern, random 3) Random variation is an aspect of demand that increases the accuracy of the forecast. Answer: FALSE Reference: Demand Patterns Difficulty: Easy Keywords: random variation, forecast accuracy 4) Aggregation is the act of clustering several similar products or services. Answer: TRUE Reference: Key Decisions on Making Forecasts Difficulty: Moderate Keywords: aggregation, clustering 5) Aggregating products or services together generally decreases the forecast accuracy. Answer: FALSE Reference: Key Decisions on Making Forecasts Difficulty: Moderate Keywords: aggregation, forecast accuracy 6) Judgment methods of forecasting are quantitative methods that use historical data on independent variables to predict demand. Answer: FALSE Reference: Key Decisions on Making Forecasts Difficulty: Moderate Keywords: judgment method, forecast, historical data, qualitative methods Learning Outcome: Describe major approaches to forecasting 7) Time-series analysis is a statistical approach that relies heavily on historical demand data to project the future size of demand. Answer: TRUE Reference: Key Decisions on Making Forecasts Difficulty: Moderate Keywords: time series, forecast, historical demand data Learning Outcome: Describe major approaches to forecasting 8) The causal method of forecasting uses historical data on independent variables (such as promotional campaigns and economic conditions) to predict the demand of dependent variables (such as sales volume). Answer: TRUE Reference: Key Decisions on Making Forecasts Difficulty: Moderate Keywords: causal method, independent variable, dependent variable Learning Outcome: Describe major approaches to forecasting 9) Salesforce estimates are extremely useful for technological forecasting. Answer: FALSE Reference: Judgment Methods Difficulty: Moderate Keywords: sales force, technological forecasting Learning Outcome: Describe major approaches to forecasting 10) Technological forecasting is an application of executive opinion in light of the difficulties in keeping abreast of the latest advances in technology. Answer: TRUE Reference: Judgment Methods Difficulty: Moderate Keywords: technological forecasting, executive opinion Learning Outcome: Describe major approaches to forecasting 11) Market research is a systematic approach to determine consumer interest by gaining consensus from a group of experts while maintaining their anonymity. Answer: FALSE Reference: Judgment Methods Difficulty: Moderate Keywords: market research, Delphi Learning Outcome: Describe major approaches to forecasting 12) Judgment methods of forecasting should never be used with quantitative forecasting methods. Answer: FALSE Reference: Judgment Methods Difficulty: Moderate Keywords: judgment, quantitative method Learning Outcome: Describe major approaches to forecasting 13) The Delphi method is a process of gaining consensus from a group of experts by debate and voting throughout several rounds of group discussion led by a moderator. Answer: FALSE Reference: Judgment Methods Difficulty: Moderate Keywords: judgment, Delphi method Learning Outcome: Describe major approaches to forecasting 14) Regression equations with a coefficient of determination close to zero are extremely accurate because they have little forecast error. Answer: FALSE Reference: Causal Methods: Linear Regression Difficulty: Moderate Keywords: regression, coefficient of determination 15) The closer the value of the sample correlation coefficient is to -1.00, the worse the predictive ability of the independent variable for the dependent variable. Answer: FALSE Reference: Causal Methods: Linear Regression Difficulty: Moderate Keywords: regression, correlation coefficient 16) The larger the slope of the regression line, the more accurate the regression forecast. Answer: FALSE Reference: Causal Methods: Linear Regression Difficulty: Easy Keywords: regression line, correlation coefficient, slope 17) A linear regression model results in the equation Y = 15 - 23X. If the coefficient of determination is a perfect 1.0, the correlation coefficient must be -1. Answer: TRUE Reference: Causal Methods: Linear Regression Difficulty: Moderate Keywords: regression, correlation coefficient, slope, coefficient of determination AACSB: Analytic skills 18) The standard error of the estimate measures how closely the data on the independent variable cluster around the regression line. Answer: FALSE Reference: Causal Methods: Linear Regression Difficulty: Moderate Keywords: standard error, regression 19) Time-series forecasts require information about only the dependent variable. Answer: TRUE Reference: Time-Series Methods Difficulty: Moderate Keywords: time-series method, dependent variable Learning Outcome: Describe major approaches to forecasting 20) A naive forecast is a time-series method whereby the forecast for the next period equals the demand for the current period. Answer: TRUE Reference: Time-Series Methods Difficulty: Moderate Keywords: naive method Learning Outcome: Describe major approaches to forecasting 21) A simple moving average of one period will yield identical results to a naive forecast. Answer: TRUE Reference: Time-Series Methods Difficulty: Moderate Keywords: simple moving average forecast, naive forecast Learning Outcome: Describe major approaches to forecasting 22) An exponential smoothing model with an alpha equal to 1.00 is the same as a naive forecasting model. Answer: TRUE Reference: Time-Series Methods Difficulty: Moderate Keywords: exponential smoothing, alpha, naïve forecast Learning Outcome: Describe major approaches to forecasting 23) When a significant trend is present, exponential smoothing forecasts can be below or above the actual demand, and must therefore be modified. Answer: TRUE Reference: Time-Series Methods Difficulty: Moderate Keywords: exponential smoothing, trend Learning Outcome: Describe major approaches to forecasting 24) The trend projection with regression model can forecast demand well into the future. Answer: TRUE Reference: Time-Series Methods Difficulty: Moderate Keywords: trend projection regression Learning Outcome: Describe major approaches to forecasting