MQM 227 Actual Questions and Correct Answers
Q1
A qualitative forecast would most likely be used for: Aggregate planning Scheduling Process
design Inventory management
Answer: C. Process design
Q2
When should qualitative methods NOT be used? When historic data are unreliable When it is
impossible to obtain historic data For short-range, repetitive decisions When making major,
costly decisions, such as facilities location
Answer: C. For short-range, repetitive decisions
Q3
A small company that manufactures rubber boots is selecting a method to forecast demand for
the next 10 years. The company recently expanded its facilities, doubling its capacity. Which of
the following forecasting methods would be preferred? Qualitative Simple exponential
smoothing Econometric Box-Jenkins
Answer: A. Qualitative
Q4
The difference between actual demand and the forecast is: Forecast error Mean absolute
percentage error Absolute deviation of forecast error Mean absolute deviation of forecast error
Answer: Forecast Error
Q5
If a sales representative tells his or her manager, "I hope to sell 20% more than last year," this
should be considered: A forecast A performance measure A goal A production plan
Answer: a goal
Q6
Which of the following is NOT a measure of forecast accuracy? Mean square error Cumulative
sum of forecast error Mean absolute deviation of forecast error Cumulative absolute deviation
of forecast error
Answer: D. Cumulative absolute deviation of forecast error
,Q7
Which phrase most closely describes the Delphi forecasting technique? Consumer survey
Individual opinions Rounds of anonymous data collection Test markets
Answer: C. Rounds of anonymous data collection
Q8
Forecast error is used for all of the following EXCEPT: To monitor erratic demand observations
or outliers To determine when the forecasting method is no longer tracking actual demand and
needs to be reset To determine the capacity cushion To determine parameter values that
provide the most accurate forecast
Answer: C. To determine the capacity cushion
Q9
Which of the following is NOT one of the most important factors in selecting a forecasting
method? User and system sophistication Time and resources available Data availability
Customer preferences
Answer: Customer preferences
Q10
Which of the following is NOT true about Collaborative Planning, Forecasting and Replenishment
(CPFR)? The basic idea is to share forecasting information with the suppliers and customers in
the supply chain. It is best applied to a few customers representing the bulk of demand. It
creates visibility in the supply chain minimizing the occurrence of the bullwhip in supply chains.
It requires advanced forecasting tools such as Box-Jenkins to improve the forecasting accuracy.
Answer: It requires advanced forecasting tools such as Box-Jenkins to improve the
forecasting accuracy.
Q11
All forecasts should include two estimates: An estimate of the demand and an estimate of the
forecasting error.
Answer: true
Q12
Quantitative forecasting methods should be used for predicting the demand patterns of new
products introduced in the market
Answer: false
, Q13
A time-series forecast model includes only a level (average) term, representing past average
demand
Answer: false
Q14
Tracking signal is the ratio between cumulative forecast error and the most recent estimate of
mean absolute deviation
Answer: true
Q15
Simple exponential smoothing forecasts are reliable for forecasting long-term demand patterns
Answer: false
Q16
Forecasting of demand is always equivalent to forecasting of sales
Answer: false
Q17
Aggregate planning and scheduling differ in that: The former ensures capacity is efficiently
used whereas the latter is the acquisition of resources. The former is short term in nature while
the latter is medium term. The former is last in the hierarchy of capacity planning decisions and
the latter is first. The former deals with acquiring resources and the latter deals with allocating
resources.
Answer: D. The former deals with acquiring resources and the latter deals with
allocating resources.
Q18
Scheduling deals with which three conflicting objectives? High efficiency, high profits, and short
lead-time High profits, low inventories, and good customer service Low inventories, high
efficiency, and good customer service Low inventories, good customer service, and short
lead-time
Answer: C. Low inventories, high efficiency, and good customer service
Q1
A qualitative forecast would most likely be used for: Aggregate planning Scheduling Process
design Inventory management
Answer: C. Process design
Q2
When should qualitative methods NOT be used? When historic data are unreliable When it is
impossible to obtain historic data For short-range, repetitive decisions When making major,
costly decisions, such as facilities location
Answer: C. For short-range, repetitive decisions
Q3
A small company that manufactures rubber boots is selecting a method to forecast demand for
the next 10 years. The company recently expanded its facilities, doubling its capacity. Which of
the following forecasting methods would be preferred? Qualitative Simple exponential
smoothing Econometric Box-Jenkins
Answer: A. Qualitative
Q4
The difference between actual demand and the forecast is: Forecast error Mean absolute
percentage error Absolute deviation of forecast error Mean absolute deviation of forecast error
Answer: Forecast Error
Q5
If a sales representative tells his or her manager, "I hope to sell 20% more than last year," this
should be considered: A forecast A performance measure A goal A production plan
Answer: a goal
Q6
Which of the following is NOT a measure of forecast accuracy? Mean square error Cumulative
sum of forecast error Mean absolute deviation of forecast error Cumulative absolute deviation
of forecast error
Answer: D. Cumulative absolute deviation of forecast error
,Q7
Which phrase most closely describes the Delphi forecasting technique? Consumer survey
Individual opinions Rounds of anonymous data collection Test markets
Answer: C. Rounds of anonymous data collection
Q8
Forecast error is used for all of the following EXCEPT: To monitor erratic demand observations
or outliers To determine when the forecasting method is no longer tracking actual demand and
needs to be reset To determine the capacity cushion To determine parameter values that
provide the most accurate forecast
Answer: C. To determine the capacity cushion
Q9
Which of the following is NOT one of the most important factors in selecting a forecasting
method? User and system sophistication Time and resources available Data availability
Customer preferences
Answer: Customer preferences
Q10
Which of the following is NOT true about Collaborative Planning, Forecasting and Replenishment
(CPFR)? The basic idea is to share forecasting information with the suppliers and customers in
the supply chain. It is best applied to a few customers representing the bulk of demand. It
creates visibility in the supply chain minimizing the occurrence of the bullwhip in supply chains.
It requires advanced forecasting tools such as Box-Jenkins to improve the forecasting accuracy.
Answer: It requires advanced forecasting tools such as Box-Jenkins to improve the
forecasting accuracy.
Q11
All forecasts should include two estimates: An estimate of the demand and an estimate of the
forecasting error.
Answer: true
Q12
Quantitative forecasting methods should be used for predicting the demand patterns of new
products introduced in the market
Answer: false
, Q13
A time-series forecast model includes only a level (average) term, representing past average
demand
Answer: false
Q14
Tracking signal is the ratio between cumulative forecast error and the most recent estimate of
mean absolute deviation
Answer: true
Q15
Simple exponential smoothing forecasts are reliable for forecasting long-term demand patterns
Answer: false
Q16
Forecasting of demand is always equivalent to forecasting of sales
Answer: false
Q17
Aggregate planning and scheduling differ in that: The former ensures capacity is efficiently
used whereas the latter is the acquisition of resources. The former is short term in nature while
the latter is medium term. The former is last in the hierarchy of capacity planning decisions and
the latter is first. The former deals with acquiring resources and the latter deals with allocating
resources.
Answer: D. The former deals with acquiring resources and the latter deals with
allocating resources.
Q18
Scheduling deals with which three conflicting objectives? High efficiency, high profits, and short
lead-time High profits, low inventories, and good customer service Low inventories, high
efficiency, and good customer service Low inventories, good customer service, and short
lead-time
Answer: C. Low inventories, high efficiency, and good customer service
