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Brs Mdm3 Tif Ch11

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Managerial Decision Modeling w/ Spreadsheets, 3e (Balakrishnan/Render/Stair)
Chapter 11 Forecasting Models

11.1 Chapter Questions

1) Consider the following data that was fitted using a Linear Trend.

Period
Actual value (or) Y
Period number (or) X
Period 1
10
1
Period 2
11
2
Period 3
9
3
Period 4
12
4
Period 5
13
5
Period 6
12
6
Period 7
15
7 The intercept of the trend line is 8.714, and the slope is 0.75. What is the forecast for period 8?
A) 13.714
B) 14.714
C) 15.714
D) 16.714
E) 15.75
Answer: B
Page Ref: 495
Topic: Trend and Seasonality in Time-Series Data
Difficulty: Moderate
AACSB: Analytic Skills

2) Which of the following is considered to be a category of forecasting models?
A) Qualitative
B) Time-series
C) Causal …show more content…

What is the Mean Absolute Deviation (MAD)?

Period
Error
1
-2
2
1
3
3
4
0
5
-1
6
2
7
4

A) 1
B) 1.86
C) 7
D) 13
E) 5
Answer: B
Page Ref: 478
Topic: Measuring Forecast Error
Difficulty: Moderate
13) Consider the following time series data. Suppose that you use exponential smoothing with an alpha of 0.7 to fit a forecasting model. The forecast for period 7 is

Period
Forecast
Actual value
Period 1
10
10
Period 2
10
11
Period 3
10.7
9
Period 4
9.51
12
Period 5
11.253
13
Period 6
12.476
11

A) 10.443
B) 12
C) 9.443
D) 12.443
E) 11.443
Answer: E
Page Ref: 489
Topic: Basic Time-Series Forecasting Models
Difficulty: Moderate

14) The least squares method for linear regression:
A) minimizes the sum of the errors
B) minimizes the sum of the squared errors
C) maximizes forecasting accuracy
D) minimizes the value of the coefficient of determination R2
E) minimizes the regression equation coefficients
Answer: B
Page Ref: 495
Topic: Trend and Seasonality in Time-Series Data
Difficulty: Moderate

15) Suppose that you intend to use Solver to compute the optimal weights for a weighted moving average. Changing variable cells would refer to:
A) the MAD cell
B) the MSE cell
C) the MAPE cell
D) the weights cells
E) the forecast cells
Answer: D
Page Ref: 487
Topic: Basic Time-Series Forecasting Models
Difficulty: Challenging
16) A time series which

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