MGSC 395 Final Exam Concept Questions And Correct Detailed Answers Graded A+.

A demand management option for a company is to even out the load on resources by producing ___________ products, or services that have similar resource requirements but different demand cycles. - correct answers A. Prescheduled products B. Promotional Products C. Backlog products ***D. Complementary products Generally, which of the following are to be avoided when managing demand? - correct answersA. Promotional pricing ***B. Backorders C. Quantity discounts D. Perishable capacity A repeatable pattern of increases or decreases in demand, depending on periods of time of within one year or less, is a time-series pattern called - correct answersA. Random ***B. Seasonal C. Trend D. Cyclical The least predictable pattern of time-series variation is called - correct answers***A. Random B. Trend C. Horizontal D. Seasonal Companies that use a two-tier forecasting system first cluster (or "roll up") several similar services or products in a process called - correct answersA. Combination B. Demand grouping C. Product clustering ***D. Aggregation Which of the following statements regarding forecasting "units of measurement" is best? - correct answers.A. "Dollars" is always the best initial forecasting unit of measurement. B. If accurately forecasting demand for a product is not possible in terms of "number of units," forecasting should be avoided. ***C. Forecasted "product units" can be translated to dollars by multiplying them by the unit price. D. Forecasting "product units" should always be avoided. _________ methods translate the opinions of managers, expert opinions, consumer surveys, and salesforce estimates into quantitative estimates. - correct answersA. Estimation ***B. Judgment C. Arbitration D. Opinion Which of the following is NOT considered a quantitative forecasting method? - correct answersA. causal methods B. time-series analysis ***C. Delphi analysis D. trend projection with regression A forecast with a large cumulative sum of forecast errors (CFE) indicates: - correct answersA. that the forecast has no bias. B. that the forecast will cause very little disruption to planning efforts. ***C. consistent forecasting mistakeslong dash—the forecast is always too high or too low. D. All of the above. ________ is the best error measure to use when making comparisons between time series for different SKUs. - correct answers***A. Mean absolute percent error B. Mean absolute deviation C. Mean squared error D. Standard deviation of the errors Which error measure lets a forecaster know that the forecast is consistently high? - correct answers***A. CFE B. MAPE C. MAD D. MSE Which statement about the forecasting process is best? - correct answers***A. Bias is the worst kind of forecast error. B. Whenever possible, forecast at the lowest level (greatest level of detail). C. The best way to improve forecast accuracy is to add additional terms to the forecast equation. D. Quantitative forecasts are better than qualitative forecasts. Judgment methods may be the only practical way to make a forecast when - correct answers***A. there is no historical data due to a new product introduction. B. the forecast made in the previous period had a MAPE of less than 10%. C. quantitative models have been performing particularly well in recent periods. D. there is a great deal of historical product data. The _________ of forecasting is a process of gaining consensus from a group of experts. - correct answersA. consulting method B. technological method C. salesforce estimate method ***D. Delphi method ____________ can also be used for forecasting the quick pace of technological change. - correct answersA. "What-if" analysis B. Exponential smoothing C. Market research ***D. Executive opinion Judgment methods are LEAST likely to be indicated in which of the following situations? - correct answersA. The underlying product technology is in transition. ***B. Short-term forecasts are made for a product with stable demand. C. A new product is being introduced. D. The Delphi method is necessary. Combination forecasts produced by averaging independent forecasts based on different methods - correct answersA. seldom performs better over time than the best single forecasting procedure. B. is prohibitively expensive. C. should not be attempted when the individual forecasts bring different kinds of information into the forecasting process. ***D. has been suggested by research to produce more accurate forecasts than a single forecasting procedure. Which of the following statements is false? - correct answersA. In a make-to-order environment, the forecasts tend to be for groups of products. B. In a make-to-stock environment, forecasts tend to be more detailed and can get down to specific individual products. C. If the lead time to buy raw materials is long, the forecasts go farther out into the future. ***D. All of the above statements are true. In step three of the forecasting process we try to achieve consensus of the forecast. One way to achieve that consensus in a formal way is to employ - correct answersA. consensus planning and forecasting (CPF). B. combination forecasting (CF). C. focus forecasting (FF). ***. collaborative planning, forecasting, and replenishment (CPFR). Which of the following is NOT a principle of the forecasting process? - correct answersA. Better processes yield better forecasts. B. The best way to improve forecast accuracy is to focus on reducing forecast error. C. Bias is the worst kind of forecast error. ***D. Whenever possible, forecast in detail at more disaggregated levels. Which of the following costs is NOT considered an inventory holding (or carrying) cost? - correct answers***A. inventory transportation costs B. inventory shrinkage costs C. inventory handling costs D. inventory storage costs Which of the following can put pressure on a company to carry small levels of inventory? - correct answersA. high ordering cost B. the need to increase workforce productivity C. the potential for stockouts and backorders ***D. high cost of capital A form of shrinkage called ________ occurs when inventory cannot be used or sold at full value, owing to model changes, engineering modifications, or unexpectedly low demand. - correct answersA. deterioration B. life-cycle shrink C. pilferage ***D. obsolescence Which of the following is NOT considered a pressure to hold large inventories? - correct answersA. the cost of placing an order B. the potential to reduce stockouts C. the need to increase machine utilization ***D. the cost of insurance A perpetual inventory system requires that - correct answers***A. inventory records are always current. B. inventory is constantly being produced. C. inventory is always in stock. D. inventory is always on order. _________ items, consisting of raw materials and work-in-process inventories, are those items whose required quantity varies with the production plans for other items held in the firm's inventory. - correct answersA. Cycle stock B. Independent demand ***C. Dependent demand D. MRO Lewis Machine Tools is considering reducing lot size to reduce cycle inventory. Which of the following is a change that should be made for lot size reduction to be effective? - correct answers***A. Increasing repeatability B. Offer seasonal pricing plans C. Increase lead times D. Allowing backorders The primary lever to reduce anticipation inventory is to - correct answersA. improve demand forecasts so that fewer surprises come from customers. B. streamline the methods for placing orders and making setups. C. rely on more equipment and labor buffers. ***D. match demand rate with production rate. What is the primary lever to reduce cycle inventory? - correct answersA. improve demand forecasts ***B. reduce the lot sizes C. use flexible automation D. place orders closer to the time when they must be received Lisa's Card Cache uses ABC analysis. Which of the following statements is NOT true of ABC analysis? - correct answersA. Inventory items are ranked on the basis of dollar usage. B. ABC analysis uses the Pareto chart concept. ***C. ABC analysis allows the company to control inventory shrinkage.