1) A sports equipment retailer needs to forecast sales by product classes one to two years out. Which forecasting model is most appropriate?

A.Moving average model.

B.Weighted moving average model.

C.Exponential smoothing.

D.Econometric model.

2) Which of the following is likely to reveal a bias effect resulting from the forecast method in use?

A.MSE (mean squared error).

B.CFE (cumulative forecast error).

C.MAD (mean absolute deviation).

D.None of the above.

3) When selecting a forecasting method, which of the following is true?

A.The method with the best fit to historical data (least error) is the best predictive model.

B.The existence of complicated data patterns will affect the method chosen.

C.Stable data patterns over time are best suited to qualitative methods.

D.Time series methods use qualitative data to smooth the forecasts.

4) The exponential smoothing forecasting technique slowly responds to changes in the mean level of demand when

A.a small alpha value is used.

B.a large alpha value is used.

C.an alpha value of 1.0 is used.

D.size of the alpha value does not affect the responsiveness.

5) Which of the following statements about forecasting is NOT correct?

A.Forecasts should have at least two numbers: one for the best estimate of demand and the other a measurement of forecasting error.

B.There is no universal forecasting method for all situations.

C.Forecasts of sales and demand will always be equal.

D.Forecasting is both an art and a science.

6) Which of the following is not a use of the error estimate?

A.To monitor erratic demand observations or outliers

B.To determine when the forecasting method is no longer tracking actual demand and needs to be reset

C.To set safety stocks or safety capacity

D.To determine parameter values that provides most accurate forecasts

E.All the above are uses of the error estimate

7) The major components (patterns) of a time series consist of all of the following EXCEPT

A.trend.

B.seasonality.

C.random error.

D.correlation.