OPSM 330 Ch. 12 Exam Questions with Verified Solutions Graded A+
Forecasts based on mathematical formulas are referred to as qualitative forecasts. - Answers
False
Continuous replenishment systems rely heavily on extremely accurate long-term forecasts. -
Answers False
The type of forecasting method selected depends on time frame, demand behavior and causes
of behavior. - Answers True
A gradual, long-term up or down movement of demand over time is referred to as a trend. -
Answers True
A seasonal pattern is an oscillating movement in demand that occurs periodically over the short
-run and is repetitive. - Answers True
Short-midrange forecasts tend to use quantitative models that forecast demand based on
historical demand. - Answers True
Long-range quantitative forecasts are used to determine future demand for new products,
markets, and customers. - Answers False
The trend toward continuous replenishment in supply chain design has shifted the need for
accurate forecasts from long-term to short-term. - Answers True
The type of forecasting method selected depends on time frame, demand behavior, and causes
of behavior. - Answers True
Because of heightened competition resulting from globalization most companies find little
strategic value in long-range forecasts. - Answers True
Movements in demand that do not follow a given pattern are referred to as random variations. -
Answers True
Because of globalization of markets, managers are finding it increasingly more difficult to
create accurate demand forecasts. - Answers True
Many companies are shifting from long-term to short-term forecasts for strategic planning. -
Answers False
Demand behavior for skis is considered cyclical. - Answers False
The long-term strategic planning process is dependent upon qualitative forecasting methods. -
Answers True
The Delphi method generates forecasts based on informed judgments and opinions from
, knowledgeable individuals. - Answers True
The most common type of forecasting method for long-term strategic planning is based on
quantitative modeling - Answers False
Time series methods use historical data to predict future demand. - Answers True
One reason time series methods are popular for forecasting is that they are relatively easy to
use and understand. - Answers True
Exponential smoothing is an averaging method for forecasting that reacts more strongly to
recent changes in demand. - Answers True
Time series methods assume that demand patterns in the past are a good predictor of demand
in the future. - Answers True
The moving average method is used for creating forecasts when there is no variation in demand.
- Answers False
Forecasting customer demand is often a key to providing good quality service. - Answers True
Because of ease of use and simplicity, exponential smoothing is preferred over smoothing
average. - Answers False
The average, absolute difference between the forecast and demand is a popular measure of
forecast error. - Answers True
The larger the mean absolute deviation (MAD) the more accurate the forecast. - Answers False
Forecast bias is measured by the per-period average of the sum of forecast errors. - Answers
False
Because of the development of advanced forecasting models managers no longer track
forecast error. - Answers False
Regression is used for forecasting when there is a relationship between the dependent variable,
demand, and one or more independent (explanatory) variables. - Answers True
Correlation in linear regression is a measure of the strength of the relationship between the
dependent variable, demand, and an independent (explanatory) variable. - Answers True
A linear regression model that relates demand to time is known as a linear trend line. - Answers
True
Linear regression relates two variables using a linear model. - Answers True
A correlation coefficient is a measure of the strength of the linear relationship between an
independent and a dependent variable. - Answers True
Forecasts based on mathematical formulas are referred to as qualitative forecasts. - Answers
False
Continuous replenishment systems rely heavily on extremely accurate long-term forecasts. -
Answers False
The type of forecasting method selected depends on time frame, demand behavior and causes
of behavior. - Answers True
A gradual, long-term up or down movement of demand over time is referred to as a trend. -
Answers True
A seasonal pattern is an oscillating movement in demand that occurs periodically over the short
-run and is repetitive. - Answers True
Short-midrange forecasts tend to use quantitative models that forecast demand based on
historical demand. - Answers True
Long-range quantitative forecasts are used to determine future demand for new products,
markets, and customers. - Answers False
The trend toward continuous replenishment in supply chain design has shifted the need for
accurate forecasts from long-term to short-term. - Answers True
The type of forecasting method selected depends on time frame, demand behavior, and causes
of behavior. - Answers True
Because of heightened competition resulting from globalization most companies find little
strategic value in long-range forecasts. - Answers True
Movements in demand that do not follow a given pattern are referred to as random variations. -
Answers True
Because of globalization of markets, managers are finding it increasingly more difficult to
create accurate demand forecasts. - Answers True
Many companies are shifting from long-term to short-term forecasts for strategic planning. -
Answers False
Demand behavior for skis is considered cyclical. - Answers False
The long-term strategic planning process is dependent upon qualitative forecasting methods. -
Answers True
The Delphi method generates forecasts based on informed judgments and opinions from
, knowledgeable individuals. - Answers True
The most common type of forecasting method for long-term strategic planning is based on
quantitative modeling - Answers False
Time series methods use historical data to predict future demand. - Answers True
One reason time series methods are popular for forecasting is that they are relatively easy to
use and understand. - Answers True
Exponential smoothing is an averaging method for forecasting that reacts more strongly to
recent changes in demand. - Answers True
Time series methods assume that demand patterns in the past are a good predictor of demand
in the future. - Answers True
The moving average method is used for creating forecasts when there is no variation in demand.
- Answers False
Forecasting customer demand is often a key to providing good quality service. - Answers True
Because of ease of use and simplicity, exponential smoothing is preferred over smoothing
average. - Answers False
The average, absolute difference between the forecast and demand is a popular measure of
forecast error. - Answers True
The larger the mean absolute deviation (MAD) the more accurate the forecast. - Answers False
Forecast bias is measured by the per-period average of the sum of forecast errors. - Answers
False
Because of the development of advanced forecasting models managers no longer track
forecast error. - Answers False
Regression is used for forecasting when there is a relationship between the dependent variable,
demand, and one or more independent (explanatory) variables. - Answers True
Correlation in linear regression is a measure of the strength of the relationship between the
dependent variable, demand, and an independent (explanatory) variable. - Answers True
A linear regression model that relates demand to time is known as a linear trend line. - Answers
True
Linear regression relates two variables using a linear model. - Answers True
A correlation coefficient is a measure of the strength of the linear relationship between an
independent and a dependent variable. - Answers True
