Test Bank Chapter 8

Test Bank Chapter 8 The repeated observations of demand for a product or service in their order of occurrence form a pattern known as a time series. - CORRECT ANSWERS True One of the basic time series patterns is random. - CORRECT ANSWERS True Random variation is an aspect of demand that increases the accuracy of the forecast. - CORRECT ANSWERS False Aggregation is the act of clustering several similar products or services. - CORRECT ANSWERS True Aggregating products or services together generally decreases the forecast accuracy. - CORRECT ANSWERS False Judgment methods of forecasting are quantitative methods that use historical data on independent variables to predict demand - CORRECT ANSWERS False Time-series analysis is a statistical approach that relies heavily on historical demand data to project the future size of demand. - CORRECT ANSWERS True 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). - CORRECT ANSWERS True Salesforce estimates are extremely useful for technological forecasting - CORRECT ANSWERS False Technological forecasting is an application of executive opinion in light of the difficulties in keeping abreast of the latest advances in technology. - CORRECT ANSWERS True Market research is a systematic approach to determine consumer interest by gaining consensus from a group of experts while maintaining their anonymity. - CORRECT ANSWERS False Judgment methods of forecasting should never be used with quantitative forecasting methods. - CORRECT ANSWERS False 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. - CORRECT ANSWERS False Regression equations with a coefficient of determination close to zero are extremely accurate because they have little forecast error. - CORRECT ANSWERS False 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. - CORRECT ANSWERS False The larger the slope of the regression line, the more accurate the regression forecast. - CORRECT ANSWERS False 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. - CORRECT ANSWERS True The standard error of the estimate measures how closely the data on the independent variable cluster around the regression line. - CORRECT ANSWERS False Time-series forecasts require information about only the dependent variable. - CORRECT ANSWERS True A naive forecast is a time-series method whereby the forecast for the next period equals the demand for the current period. - CORRECT ANSWERS True A simple moving average of one period will yield identical results to a naive forecast. - CORRECT ANSWERS True An exponential smoothing model with an alpha equal to 1.00 is the same as a naive