MQM 227 Actual Questions and Correct Answers
Q1
Seasonality is represented by an irregular pattern of demand.
Answer: Regarding types of time-series components, which of the following
statements is incorrect? Random error are the normal fluctuations in demand that are
not erratic to be considered a cycle, seasonality, a trend, or a level demand. A trend is
represented as an increase or decrease in the average demand over time. A cycle is
represented by increasing or decreasing demand over long time periods. A level
demand refers to the relatively constant demand during a time interval. Seasonality is
represented by an irregular pattern of demand.
Q2
The qualitative type of forecasting utilizes time-series and causal approaches.
Answer: Which of the following statements is incorrect? In organizations, managers
are usually most interested in predicting future demand. In CPFR, a long-term,
mutually beneficial, collaborative relationship is needed. There is no universal
forecasting method for all situations. The qualitative type of forecasting utilizes
time-series and causal approaches. In a regular moving average calculation, all of the
months included in the calculation are weighted equally.
Q3
Casual forecasting methods are great for predicting turning points in demand.
Answer: Which of the following statements is incorrect? Medium-range forecasts are
usually 6 months to two years in the future. Short-range forecasts are good for
procuring materials and work scheduling. Causal forecasting methods are usually
more accurate than time-series models for medium- to long-range forecasts.
Short-range forecasts are usually less than 6 months in the future. Casual forecasting
methods are great for predicting turning points in demand.
Q4
Weighted moving average is the simplest method of time-series forecasting.
Answer: Which of the following statements is incorrect? In a weighted moving average
calculation, demand in more recent months is often given a higher coefficient so the
moving average calculation is more responsive to more recent changes in demand.
Qualitative forecasting methods rely on managerial judgment. Weighted moving
average is the simplest method of time-series forecasting. For the weighted moving
average, the sum of coefficients always equals to 1.0. An essential forecast number is
the forecasting error (e.g., standard deviation or range).
,Q5
Time-series forecasting is used to make general analyses of past demand patterns over time.
Answer: Which of the following statements is incorrect? Long-range forecasts are good
for planning facilities and processes. In CPFR, all parties must be willing to share
sensitive information about demand data, future sales promotions, potential orders,
new products, and lead times. Time-series forecasting uses these demand patterns to
predict demand in the future. Quantitative forecasting generally assumes that past
data and data patterns are reliable predictors of the future. Time-series forecasting is
used to make general analyses of past demand patterns over time.
Q6
Quantitative forecasting methods use an implicit ("best guess") forecasting model.
Answer: Which of the following statements is incorrect? In a weighted moving
average, some of the months in the calculation are considered more important and are
assigned a higher coefficient. In CPFR, sufficient time and resources must be provided
for it to succeed. Exponential smoothing is a special form of the weighted moving
average. Quantitative forecasting methods use an implicit ("best guess") forecasting
model. An essential forecast number is the best estimate of demand (e.g., mean,
median, mode).
Q7
Safety capacity refers to the extra products that are kept in inventory.
Answer: Which of the following statements is incorrect? Marketing uses forecasts for
planning products & services, promotions, and pricing. The greater the number of
periods used in the moving average method, the more slowly the forecast reacts to
real changes in market demand. The greater the number of periods used in the moving
average method, the more stable the forecast. Safety capacity refers to the extra
products that are kept in inventory. The purpose of forecast accuracy is to set safety
stocks or safety capacity and thereby ensure a desired level of protection against
stockout.
Q8
Exponential smoothing is well adapted to small number of items to be forecast.
Answer: Which of the following statements is incorrect? In the Delphi method, a
forecast is developed by a panel of experts answering a series of questions on
successive rounds. In a Life-Cycles Analogy method, predictions are based on the life
cycles of similar products. In the regression method, least squares are used to obtain
a best fit between the variables. Exponential smoothing is well adapted to small
number of items to be forecast. In the Box-Jenkins method, autocorrelation methods
are used to identify underlying time series.
, Q9
Which of the following statements is incorrect? Forecasting deals with what we think will
happen in the future. The purpose of forecast accuracy is to determine the parameter values
(e.g., N and alpha) that provide the forecast with the best accuracy. Forecasting is the art and
science of predicting future events. Demand and sales are usually the same thing. Good
planning uses a forecast as an input.
Answer: Demand and sales are usually the same thing.
Q10
Qualitative forecasting methods are useful when there is ample data.
Answer: Which of the following statements is incorrect? Qualitative forecasting
methods are useful when there is ample data. In forecasting, a lack of data may occur
when the product is a new innovation or invention. When a major employer leaves an
area, past sales data may not be a reliable predictor of the future. Forecasts will
almost always be wrong because the future is never certain. Qualitative forecasting
methods are useful when past data is not reliable predictors of the future.
Q11
The purpose of forecast accuracy is to monitor predictable demand observations or outliers
(which should be carefully evaluated and perhaps excluded from data analysis).
Answer: Which of the following statements is incorrect? Through planning, we
consciously attempt to alter future events. The purpose of forecast accuracy is to
determine when the forecasting method is no longer tracking actual demand and
should be reset. Forecasting is only used to predict future events. Whenever demand
is not constrained by capacity, inventory, or other management policies; the
forecasting of demand should be the same as the forecasting of sales. The purpose of
forecast accuracy is to monitor predictable demand observations or outliers (which
should be carefully evaluated and perhaps excluded from data analysis).
Q12
Short-range forecasts are good for aggregate planning decisions, budgeting, and long-lead-time
items.
Answer: Which of the following statements is incorrect? Long-range forecasts are
usually two or more years in the future. Causal forecasting methods develops a
cause-and-effect model between demand and other variables. Finance uses
forecasting as an input to financial planning. Short-range forecasts are good for
aggregate planning decisions, budgeting, and long-lead-time items. Inventory
decisions that result in purchasing actions tend to be relatively short-range in nature
and deal with specific products.
Q1
Seasonality is represented by an irregular pattern of demand.
Answer: Regarding types of time-series components, which of the following
statements is incorrect? Random error are the normal fluctuations in demand that are
not erratic to be considered a cycle, seasonality, a trend, or a level demand. A trend is
represented as an increase or decrease in the average demand over time. A cycle is
represented by increasing or decreasing demand over long time periods. A level
demand refers to the relatively constant demand during a time interval. Seasonality is
represented by an irregular pattern of demand.
Q2
The qualitative type of forecasting utilizes time-series and causal approaches.
Answer: Which of the following statements is incorrect? In organizations, managers
are usually most interested in predicting future demand. In CPFR, a long-term,
mutually beneficial, collaborative relationship is needed. There is no universal
forecasting method for all situations. The qualitative type of forecasting utilizes
time-series and causal approaches. In a regular moving average calculation, all of the
months included in the calculation are weighted equally.
Q3
Casual forecasting methods are great for predicting turning points in demand.
Answer: Which of the following statements is incorrect? Medium-range forecasts are
usually 6 months to two years in the future. Short-range forecasts are good for
procuring materials and work scheduling. Causal forecasting methods are usually
more accurate than time-series models for medium- to long-range forecasts.
Short-range forecasts are usually less than 6 months in the future. Casual forecasting
methods are great for predicting turning points in demand.
Q4
Weighted moving average is the simplest method of time-series forecasting.
Answer: Which of the following statements is incorrect? In a weighted moving average
calculation, demand in more recent months is often given a higher coefficient so the
moving average calculation is more responsive to more recent changes in demand.
Qualitative forecasting methods rely on managerial judgment. Weighted moving
average is the simplest method of time-series forecasting. For the weighted moving
average, the sum of coefficients always equals to 1.0. An essential forecast number is
the forecasting error (e.g., standard deviation or range).
,Q5
Time-series forecasting is used to make general analyses of past demand patterns over time.
Answer: Which of the following statements is incorrect? Long-range forecasts are good
for planning facilities and processes. In CPFR, all parties must be willing to share
sensitive information about demand data, future sales promotions, potential orders,
new products, and lead times. Time-series forecasting uses these demand patterns to
predict demand in the future. Quantitative forecasting generally assumes that past
data and data patterns are reliable predictors of the future. Time-series forecasting is
used to make general analyses of past demand patterns over time.
Q6
Quantitative forecasting methods use an implicit ("best guess") forecasting model.
Answer: Which of the following statements is incorrect? In a weighted moving
average, some of the months in the calculation are considered more important and are
assigned a higher coefficient. In CPFR, sufficient time and resources must be provided
for it to succeed. Exponential smoothing is a special form of the weighted moving
average. Quantitative forecasting methods use an implicit ("best guess") forecasting
model. An essential forecast number is the best estimate of demand (e.g., mean,
median, mode).
Q7
Safety capacity refers to the extra products that are kept in inventory.
Answer: Which of the following statements is incorrect? Marketing uses forecasts for
planning products & services, promotions, and pricing. The greater the number of
periods used in the moving average method, the more slowly the forecast reacts to
real changes in market demand. The greater the number of periods used in the moving
average method, the more stable the forecast. Safety capacity refers to the extra
products that are kept in inventory. The purpose of forecast accuracy is to set safety
stocks or safety capacity and thereby ensure a desired level of protection against
stockout.
Q8
Exponential smoothing is well adapted to small number of items to be forecast.
Answer: Which of the following statements is incorrect? In the Delphi method, a
forecast is developed by a panel of experts answering a series of questions on
successive rounds. In a Life-Cycles Analogy method, predictions are based on the life
cycles of similar products. In the regression method, least squares are used to obtain
a best fit between the variables. Exponential smoothing is well adapted to small
number of items to be forecast. In the Box-Jenkins method, autocorrelation methods
are used to identify underlying time series.
, Q9
Which of the following statements is incorrect? Forecasting deals with what we think will
happen in the future. The purpose of forecast accuracy is to determine the parameter values
(e.g., N and alpha) that provide the forecast with the best accuracy. Forecasting is the art and
science of predicting future events. Demand and sales are usually the same thing. Good
planning uses a forecast as an input.
Answer: Demand and sales are usually the same thing.
Q10
Qualitative forecasting methods are useful when there is ample data.
Answer: Which of the following statements is incorrect? Qualitative forecasting
methods are useful when there is ample data. In forecasting, a lack of data may occur
when the product is a new innovation or invention. When a major employer leaves an
area, past sales data may not be a reliable predictor of the future. Forecasts will
almost always be wrong because the future is never certain. Qualitative forecasting
methods are useful when past data is not reliable predictors of the future.
Q11
The purpose of forecast accuracy is to monitor predictable demand observations or outliers
(which should be carefully evaluated and perhaps excluded from data analysis).
Answer: Which of the following statements is incorrect? Through planning, we
consciously attempt to alter future events. The purpose of forecast accuracy is to
determine when the forecasting method is no longer tracking actual demand and
should be reset. Forecasting is only used to predict future events. Whenever demand
is not constrained by capacity, inventory, or other management policies; the
forecasting of demand should be the same as the forecasting of sales. The purpose of
forecast accuracy is to monitor predictable demand observations or outliers (which
should be carefully evaluated and perhaps excluded from data analysis).
Q12
Short-range forecasts are good for aggregate planning decisions, budgeting, and long-lead-time
items.
Answer: Which of the following statements is incorrect? Long-range forecasts are
usually two or more years in the future. Causal forecasting methods develops a
cause-and-effect model between demand and other variables. Finance uses
forecasting as an input to financial planning. Short-range forecasts are good for
aggregate planning decisions, budgeting, and long-lead-time items. Inventory
decisions that result in purchasing actions tend to be relatively short-range in nature
and deal with specific products.
