IMM 8

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1) Which of the following statements is a true statement about forecasting?
I. It must be done by all who wish to meet the demands of the future.
II. Companies who make to order do NOT have to forecast.
A) II only is true.
B) I and II are true.
C) I only is true.
D) Neither I nor II are true.
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1) Which of the following statements is a true statement about forecasting?
I. It must be done by all who wish to meet the demands of the future.
II. Companies who make to order do NOT have to forecast.
A) II only is true.
B) I and II are true.
C) I only is true.
D) Neither I nor II are true.
C) I only is true.
Which of the following is NOT a component of a demand pattern?
A) random variation
B) standard deviation
C) seasonal variation
D) trend
E) All of the above are components of a demand pattern.
B) standard deviation
Which of the following is a true statement about the general principles of forecasting?
A) Forecasts are more accurate for nearer periods of time.
B) Every forecast should include an estimate of error.
C) Forecasts are more accurate for larger groups of items.
D) All of the above are general principles of forecasting.
E) None of the above is a general principle of forecasting.
D) All of the above are general principles of forecasting.
Which of the following statements is true?
A) Dependent demand items should be forecast.
B) Forecasts for families of products should be built up from individual product forecasts.
C) A forecast for sales next week will not be as accurate as for a year from now.
D) All of the above are true.
E) None of the above is true.
E) None of the above is true.
Which of the following statements is true?
A) Forecasts made in dollars for total sales should be used for manufacturing.
B) If we wish to forecast demand, then past sales must be used for the forecast.
C) Forecasts should be made for all items, models, and options manufactured.
D) All of the above are true.
E) None of the above is true.
E) None of the above is true.
A firm manufactures a line of vacuum cleaners composed of standard, custom and deluxe models. All are essentially the same except for the options and add-ons. What should they forecast?

A) each model
B) the total of all models
C) each model and add the forecasts together
D) all of the above
E) none of the above
B) the total of all models
Which of the following is NOT true?
A) Circumstances relating to historical data should be recorded.
B) Demand for different groups should be recorded separately.
C) Number of orders shipped is a good measure of demand for an item.
D) None of the above is true.
C) Number of orders shipped is a good measure of demand for an item.
Which of the following statements is true regarding forecasting techniques?
A) Techniques that use external economic indicators are classified as extrinsic.
B) Intrinsic techniques use historical data.
C) Qualitative techniques are based on judgment.
D) All of the above are true.
E) None of the above is true.
D) All of the above are true.
What important assumption is made about statistical (quantitative) forecasting methods?
A) The past is a valid indicator of the future.
B) Demand trend is seldom linear.
C) Random variations are small.
D) Seasonal variations are small.
E) all of the above
A) The past is a valid indicator of the future.
Which of the following methods can be used to forecast the demand for a NEW product?
A) qualitative techniques
B) equation fitting
C) moving averages
D) all of the above
E) none of the above
A) qualitative techniques
A forecasting technique that takes the average demand for some past number of periods is called:A) moving average. B) exponential smoothing. C) trend time analysis. D) none of the above E) all of the aboveDemand over the past three months has been 700, 750, and 900. Using a three-month moving average, what is the forecast for month four? A) 822 B) 750 C) 783 D) 900 E) 700C) 783The old forecast was for 200 units and last month's sales were 225 units. If (alpha) is 0.2, what is the forecast for next month? A) 200 B) 212 1/2 C) 205 D) 210 E) 225C) 205Which of the following statements is true? A) The seasonal index is an estimate of how much the demand during the season will be above or below the average demand. B) Demand fluctuations that depend on the time of the year, week or day are called seasonality. C) Seasonality ALWAYS occurs in summer, winter, spring and fall. D) A and B are true. E) B and C are trueD) A and B are true.If the average quarterly demand is 200 units and the first quarter demand is 350 units, what is the seasonal index for the quarter? A) .57 B) 350 C) 200 D) 1.75 E) none of the aboveD) 1.75Which of the following statements is true? A) Seasonalize the base forecast to predict actual demand for future periods. B) Deseasonalized data should be used for forecasting. C) Actual sales should only be compared on a month-to-month basis. D) A and B are true. E) B and C are true.D) A and B are true.If the February demand for a product is 5,000 units and the seasonal index for February is 0.75, what is the Deseasonalized February demand? A) 10,000 B) 3,750 C) 15,000 D) 8,750 E) 6,667E) 6,667Forecast error will be caused by: A) random variation from the average demand. B) errors in forecasting average demand. C) differences in lead times. D) A and B above E) none of the aboveD) A and B aboveWhich of the following statements is true? A) In a normal distribution, the error will be within 1 MAD of the average about 60% of the time. B) Usually forecast error is distributed normally about the average demand. C) The mean absolute deviation can be used as a measure of forecast error. D) All of the above are true. E) None of the above is trueD) All of the above are true.Which of the following statements is true? A) When actual demand exceeds a reasonable error, it should be investigated to discover the cause of the error. B) Forecast error does not need to be measured. C) Forecasts do not need to be tracked. D) All of the above are true. E) None of the above is true.A) When actual demand exceeds a reasonable error, it should be investigated to discover the cause of the error.Forecasts are far more accurate for which of the following? A) end use components B) individual items C) short term D) product familiesD) product familiesWhich of the following is good for short-range forecasts, can detect trends, but lags the trend? A) forecast smoothing B) exponential smoothing C) stable forecasting D) delphi techniqueB) exponential smoothingWhich of the following is NOT a source of demand? A) internal customers B) stockholders C) external customers D) spare parts) stockholdersWhen the demand for one item can be used to forecast the demand for another item, the demand for the first item is called which of the following? A) a demand manager B) a leading indicator C) a seasonal index D) a forward commodityB) a leading indicatorWhich of the following best describes the concept of Collaborative Planning, Forecasting, and Replenishment? A) supply chain partners developing joint business plans B) supply chain partners sharing inventory positions and demands C) supply chain partners combining production facilities D) supply chain partners sharing MRP outputsA) supply chain partners developing joint business plansWhich of the following correctly describes demand management? A) making delivery promises B) setting priorities for demand when supply will not cover all demand C) synchronizing market demand with company capabilities D) all of the above E) none of the aboveD) all of the above