BUS CH 12

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The primary difference between demand management and demand forecasting is:
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The primary difference between demand management and demand forecasting is:
Demand management is proactive, while forecasting attempts to predict.
Strategic demand planning would best be utilized:
To decide whether or not to close a manufacturing plant.
The demand for housing is characterized by a regular pattern of increasing to a peak, then falling. When the demand reaches a low point, it then repeats the pattern. This pattern usually takes place over a three- to five-year period. This is an example of which type of demand pattern?
Seasonality and cycles
Suppose your firm is about to launch a radically new product. The type of demand forecasting system you would most likely use is:
Executive judgment.
An office manager forecasts demand for office stationery by exponential smoothing, with alpha = 0.4. Actual demand two weeks ago (i.e., the week before last) was 12 boxes, but the forecast for that period was only 10. Actual demand last week was 7. What was the forecast for last week?
10.8
For Platinum Nugget Hotel in Las Vegas, Saturday is the best day of the week for business. The gambling take for the hotel on Saturdays over the past four weeks was: Week $Take

1. $250,000
2. $190,000
3. $300,000
4. $280,000

Using a moving average with n = 3 terms, what would be the forecast for week 5?
$256,667
For Platinum Nugget Hotel in Las Vegas, Saturday is the best day of the week for business. The gambling take for the hotel on Saturdays over the past four weeks was: Week $Take

1. $250,000
2. $190,000
3. $300,000
4. $280,000

Platinum Nugget uses a three-period weighted moving average to forecast demand, with at = 0.6, at-1 = 0.3, and at-2 = 0.1. What is the forecast for week 5?
$277,000
Alpha Company sold 2,000 widgets yesterday. It had forecasted sales of 1,900 units. Using exponential smoothing with a smoothing constant of 0.6, what is the forecast for today's sales of widgets?
1,960
Jones Company had sales of $100,000 last week. The company had forecasted that sales would be $120,000. Using exponential smoothing with a smoothing constant of 0.2, what is the forecast for this week's sales?
$116,000
Over a six-month period, the demand for a product has been:
June = 200, July = 210, August = 240, September = 240, October = 260, and November = 280. The three-month moving average forecast for December is
260
Convex Computer Company makes many different forecasts. Which of the following forecasts is probably the least accurate?Total number of laptops with 2 gigabyte RAM, 80 gigabyte hard drive, and 16 x DVD drive to be sold next year.A company has the information shown in Exhibit 12-1 regarding its forecast performance in the past three periods. Exhibit 12-1 What is the mean absolute deviation (MAD)?200Given the data in Exhibit 12-1, the bias of these forecasts is:Negative.Designing postponable products has the potential to allow operations managers to:Move from build-to-stock to assemble or make-to-order operations.In recent years some companies have begun to work closely with their customers and/or suppliers by sharing information to develop demand plans and execute those plans. The procedure they are following is known as:Collaborative planning, forecasting, and replenishment.Assume that the forecast for the last period is FITt = 200 units, and recent experience suggests a likely sales increase of 10 units each period. Actual sales for the last period reached 230 units. Assuming a smoothing coefficient of α = 0.20 and a trend smoothing coefficient of β = 0.10, what is the BASE forecast for the next period?206Using the data in the previous problem, what is the ADJUSTED forecast for the next period?216.6Continuing with the preceding problem, demand in period t+1 turned out to be 220. What is the adjusted forecast for period t+2 (choose the closes answer)?227.3Zanda Corp. has experienced demand in the last four years shown in Exhibit 12-2. Exhibit 12-2 What is the trend value (b) in the data (choose the closest answer)?5.6 units/periodUsing the data in Exhibit 12-2 for Zanda, what is the linear regression forecast for period 5 (choose the nearest number of whole units)?44Jones Corp. has noticed that sales of its product seem to be related to a variable it calls Gamma. It has developed the data shown in Exhibit 12-3. Exhibit 12-3 Develop a simple linear regression from the data and tell Jones what the sales forecast will be if Jones expects Gamma to be 16 (round your forecast to the nearest number of whole units).31Using the data from Exhibit 12-3 and the regression model, what is the sales forecast if Gamma is expected to be 21? (Round your forecast to the nearest number of whole units.)39A company uses actual demand data to develop its seasonal indices. It has the data shown in Exhibit 12-4 for each quarter of the previous two years. Exhibit 12-4 What is the seasonal index for Quarter 1?0.732Using the data from Exhibit 12-4, the company has forecasted next year's demand to be 400. What is the seasonally adjusted forecast for Quarter 1 (choose the closest answer).73A company has the data in Exhibit 12-5 concerning its forecast performance over the past four time periods. Exhibit 12-5 Complete the Exhibit 12-5 and compute the MAD.20Using the data in Exhibit 12-5, what is the MAPE?5.99 percentIn examining the data in Exhibit 12-5, the manager exclaimed that he was very happy to see no bias in the forecasts. How would you respond to the manager?I'm sorry, but there appears to be a very strong positive bias.Zanda Corp. has been testing the performance of two different forecasting models to see which it should adopt for use. It wants to choose the model that has the smaller standard deviation of the forecast errors. Zanda should compare which of the following to make its choice?RMSE of the two modelsThe tracking signal will suggest to a manager thatA forecast mode's parameters may need adjustment.A forecasting system that changes the value of the alpha parameter in response to the level of forecast error is known as:An adaptive model.Long-term/strategic demand planning is typically done using what units?Total business unit salesWhat is the relationship between demand management and demand forecasting?Demand management plans are usually an input to demand forecasting.Which of the following factors should be considered when one designs a forecasting process?Time horizon for planning. Level of detail for planning. Availability of data. All of these.A forecasting technique that seeks inputs from people who are in close contact with customers is known as:Grassroots forecasting.How does product design affect forecasting accuracy?Postponable product designs remove the need to forecast demand for final product configurations.