Exam Questions 4th Edition Forecasting Ch.13

Matching Supply with Demand: An Introduction to Operations Management, 4e (Cachon)

Chapter 13 Forecasting

[The following information applies to questions 1-2.]

A relatively young trampoline park company, named Wiggles Out, has been studying the market-demand within a large city and surrounding area for years. It has recently opened up a location between the city and a large suburb that has a substantial population of young families.

1) Wiggles Out has utilized a system that includes automated and expert panel forecasting. What time horizon did they work under to determine the forecasted demand for this new location?

A) Short-term forecasts

B) Mid-term forecasts

C) Long-term forecasts

D) Time-series analysis

E) Generational analysis

Difficulty: 3 Hard

Topic: Forecasting Framework

AACSB: Reflective Thinking

Blooms: Analyze

2) The co-owners of Wiggles Out have been attempting to forecast the number of jumpers each week for the last three months since the park opened. Now, they are trying to tighten up spending as they enter the second quarter. For week twelve, for example, the co-owners forecasted an optimistic amount of 370 jumpers but only ended up welcoming 245. What was their forecast error for week 12?

Difficulty: 3 Hard

Topic: Evaluating the Quality of a Forecast

AACSB: Knowledge Application

Blooms: Apply

[The following information applies to questions 3-9.]

The co-owners of Wiggles Out have contracted a business demand forecast expert to help them with the forecasting so that they can better prepare for the crowd fluctuations. This expert includes variables such as weather, advertising, and school sessions to create her forecasts. View the table below for a comparison between the co-owners' forecasts and the expert's forecasts for the next four weeks.

3) What is the co-owners' forecast error on average?

Difficulty: 3 Hard

Topic: Evaluating the Quality of a Forecast

AACSB: Knowledge Application

Blooms: Apply

4) What is the expert's forecast error on average?

Difficulty: 3 Hard

Topic: Evaluating the Quality of a Forecast

AACSB: Knowledge Application

Blooms: Apply

5) Based on the forecast error averages above, what can we determine?

A) The expert's forecast error is wrong, on average.

B) The co-owners forecast error is right, on average.

C) The co-owners forecast on average is unbiased, and the expert's forecast on average is biased.

D) All of the above.

E) None of the above.

Difficulty: 3 Hard

Topic: Evaluating the Quality of a Forecast

AACSB: Analytical Thinking

Blooms: Analyze

6) In order to gain a better understanding of whose forecast is more accurate, the co-owners decide to analyze forecast errors during the four weeks. What is the mean absolute error, or MAE, of the co-owners' four-week forecast?

Difficulty: 3 Hard

Topic: Evaluating the Quality of a Forecast

AACSB: Analytical Thinking

Blooms: Analyze

7) What is the mean absolute error, or MAE, of the expert's four-week forecast?

Difficulty: 3 Hard

Topic: Evaluating the Quality of a Forecast

AACSB: Analytical Thinking

Blooms: Analyze

8) Based on the MAE data for both the co-owners and the expert, who is doing a better job with forecasting the number of jumpers per week?

Difficulty: 3 Hard

Topic: Evaluating the Quality of a Forecast

AACSB: Reflective Thinking

Blooms: Analyze

9) If the co-owners use the naïve forecasting model, how many jumpers will Wiggles Out welcome during the course of week 5?

A) 400

B) 320

C) 311.25

D) 390

E) 380

Difficulty: 3 Hard

Topic: Eliminating Noise from Old Data

AACSB: Knowledge Application

Blooms: Apply

[The following information applies to questions 10-15.]

A city in South Florida is tracking traffic accident data during its peak season for tourism. View the chart below to see these dismal numbers.

10) Based on the traffic accident data, how many traffic accidents are forecasted for week 10 using the naïve method?

Difficulty: 3 Hard

Topic: Eliminating Noise from Old Data

AACSB: Knowledge Application

Blooms: Apply

11) Based on the table provided, what is the three-week moving average forecast for week 10?

Difficulty: 3 Hard

Topic: Eliminating Noise from Old Data

AACSB: Knowledge Application

Blooms: Apply

12) Based on the table provided, what is the four-week moving average forecast for week 10?

Difficulty: 3 Hard

Topic: Eliminating Noise from Old Data

AACSB: Knowledge Application

Blooms: Apply

13) Assume a smoothing parameter of .1 and a forecasted amount of accidents for week 9 was 24. What is the exponential smoothing forecast for week 10?

A) 28.4

B) 28

C) 24

D) 24.2

E) 24.4

Difficulty: 3 Hard

Topic: Eliminating Noise from Old Data

AACSB: Knowledge Application

Blooms: Apply

14) Historically, the second week of the peak tourist season has some of the highest amounts of traffic accidents as travelers come into the area. The forecast for week 2 was originally 35. Assuming a .5 smoothing parameter, what was the forecast for week 3 (before we knew the actual demand)?

A) 35

B) 29.5

C) 24

D) 24.5

E) 35.5

Difficulty: 3 Hard

Topic: Eliminating Noise from Old Data

AACSB: Knowledge Application

Blooms: Apply

15) Let's say the forecast for week 7 was 29 and assume the smoothing parameter is .3. Based on this information, what was the forecast for week 8 before the actual amount was realized?

Difficulty: 3 Hard

Topic: Eliminating Noise from Old Data

AACSB: Knowledge Application

Blooms: Apply

16) Which of the following is a reason why forecasting based on time-series analysis might limit accuracy?

A) Expert insight is omitted.

B) Based on past data alone.

C) Seasonality.

D) Long-term pattern trends.

E) All of the above.

Difficulty: 3 Hard

Topic: Eliminating Noise from Old Data

AACSB: Reflective Thinking

Blooms: Analyze

17) An aging theatre company has seen a steady decrease in audience members each weekend (when it is open). During the first week of the summer season, 190 people bought tickets for their production. Week 2 yielded 180 people, 175 tickets were sold in week 3, and week 4 only produced 166. Based on the two-week moving average forecast, how many theatre tickets might sell in week 5?

Difficulty: 3 Hard

Topic: Eliminating Noise from Old Data

AACSB: Knowledge Application

Blooms: Apply

18) A current demand was forecasted to be 595 with an actual demand of 578. Assuming a smoothing parameter of 0.3, a trend smoothing parameter of 0.5, and an initial trend forecast of 4, what is the smoothed demand forecast for the next period?

Difficulty: 3 Hard

Topic: Time Series Analysis —Trends

AACSB: Knowledge Application

Blooms: Apply

19) With the information above, what is the exponentially smoothed trend?

Difficulty: 3 Hard

Topic: Time Series Analysis —Trends

AACSB: Knowledge Application

Blooms: Apply

20) What benefit can a subjective forecast offer supply managers?

A) Factual data.

B) Automated information.

C) Time-saving efficiency.

D) Insight that goes beyond the present time.

E) The suggestion that the future will be like the past.

Difficulty: 3 Hard

Topic: Expert Panels and Subjective Forecasting

AACSB: Reflective Thinking

Blooms: Analyze