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1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.Forecasting and Predictive Analytics with Forecast X, 7e (Keating) Chapter 1 Introduction to Business Forecasting and Predictive Analytics
1) Which of the following does not require sophisticated quantitative forecasts?
- Accounting revenue forecasts for tax purposes.
- Money managers use of interest rate forecasts for asset allocation decisions.
- Managers of power plants using weather forecasts in forecasting power demand.
- State highway planners require peak load forecasts for planning purposes.
- All of the options require sophisticated quantitative forecasts.
Answer: E
Difficulty: 1 Easy
Topic: Forecasting in Business Today
Learning Objective: 1-03 Distinguish between qualitative and quantitative forecasting.
Accessibility: Keyboard Navigation
Gradable: automatic
2) Under what circumstances may it make sense not to prepare a business forecast?
- No data is readily available.
- The future will be no different from the past.
- The forecast horizon is 40 years.
- There is no consensus among informed individuals.
- The industry to forecast is undergoing dramatic change.
Answer: B
Difficulty: 1 Easy
Topic: Forecasting and Supply Chain Management
Learning Objective: 1-05 Explain how forecasting relates to supply chain efficiency.
Accessibility: Keyboard Navigation
Gradable: automatic
3) What is most likely to be the major difference between forecasting sales of a private business versus forecasting the demand of a public good supplied by a governmental agency?
- Amount of data available
- Underlying economic relationships
- Lack of market-determined price data for public goods
- Last of historical data
- Lack of quantitative ability by government forecasters
Answer: C
Difficulty: 1 Easy
Topic: Forecasting in The Public and Not-For-Profit Sectors
Learning Objective: 1-03 Distinguish between qualitative and quantitative forecasting.
Accessibility: Keyboard Navigation
Gradable: automatic
Forecasting and Predictive Analytics with Forecast X (TM), 7e By Barry Keating, Holton Wilson, John Solutions Test Bank all Chapters 1 / 4
2 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.4) Which of the following points about supply chain management is incorrect?
- Forecasts are required at each step in the supply chain.
- Forecasts of sales are required for partners in the supply chain.
- Collaborative forecasting systems across the supply chain are needed.
- If you get the forecast right, you have the potential to get everything else right in the supply
- None of the options are incorrect.
chain.
Answer: E
Difficulty: 1 Easy
Topic: Forecasting and Supply Chain Management
Learning Objective: 1-05 Explain how forecasting relates to supply chain efficiency.
Accessibility: Keyboard Navigation
Gradable: automatic
5) Which of the following is not typically part of the traditional forecasting textbook?
- Classical statistics applied to business forecasting
- Use of computationally intensive forecasting techniques
- Attention to simplifying assumptions about the data
- Discussion of probability distributions
- Attention to statistical inference
Answer: B
Difficulty: 2 Medium
Topic: Forecasting in Business Today
Learning Objective: 1-03 Distinguish between qualitative and quantitative forecasting.
Accessibility: Keyboard Navigation
Gradable: automatic
6) Which subjective forecasting method depends upon the anonymous opinion of a panel of individuals to generate sales forecasts?
- Sales Force Composites
- Customer Surveys
- Jury of Executive Opinion
- Delphi Method
- None of the options are correct.
Answer: D
Difficulty: 1 Easy
Topic: The Delphi Method
Learning Objective: 1-04 Discuss four types of qualitative forecast methods.
Accessibility: Keyboard Navigation
Gradable: automatic
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3 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.7) Which subjective sales forecasting method may have the most information about the spending plans of customers for a specific firm?
- Sales Force Composites
- Index of consumer sentiment
- Jury of Executive Opinion
- Delphi Method
- None of the options are correct.
Answer: A
Difficulty: 1 Easy
Topic: Sales Force Composites
Learning Objective: 1-04 Discuss four types of qualitative forecast methods.
Accessibility: Keyboard Navigation
Gradable: automatic
8) Which subjective sales forecasting technique may have problems with individuals who have a dominant personality?
- Sales Force Composites
- Customer Surveys
- Jury of Executive Opinion
- Delphi Method
- None of the options are correct.
Answer: C
Difficulty: 1 Easy
Topic: Jury of Executive Opinion
Learning Objective: 1-04 Discuss four types of qualitative forecast methods.
Accessibility: Keyboard Navigation
Gradable: automatic
9) Which of the following methods is not useful for forecasting sales of a new product?
- Time series techniques requiring lots of historical data
- Delphi Method
- Consumer Surveys
- Test market results
- All of the options are correct.
Answer: A
Difficulty: 1 Easy
Topic: New Product Forecasting
Learning Objective: 1-06 Discuss forecasting for new products.
Accessibility: Keyboard Navigation
Gradable: automatic
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4 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.10) Which of the following is not considered a subjective forecasting method?
- Sales force composites
- Naïve methods
- Delphi methods
- Juries of executive opinion
- Consumer surveys
Answer: B
Difficulty: 1 Easy
Topic: Qualitative or Subjective Forecasting Methods
Learning Objective: 1-04 Discuss four types of qualitative forecast methods.
Accessibility: Keyboard Navigation
Gradable: automatic
11) Which of the following is not an argument for the use of subjective forecasting models?
- They are easy for management to understand
- They are quite useful for long-range forecasts
- They provide valuable information that may not be present in quantitative models
- They are useful when data for using quantitative models is extremely limited
- None of the options are correct.
Answer: E
Difficulty: 1 Easy
Topic: Qualitative or Subjective Forecasting Methods
Learning Objective: 1-04 Discuss four types of qualitative forecast methods.
Accessibility: Keyboard Navigation
Gradable: automatic
12) Forecasts based solely on the most recent observation of the variable of interest
- are called "naïve" forecasts.
- are the simplest of all quantitative forecasting methods.
- lead to loss of one data point in the forecast series relative to the original series.
- are consistent with the "random walk" hypothesis in finance, which states that the optimal
- All of the options are correct.
forecast of today's stock rate of return is yesterday's actual rate of return.
Answer: E
Difficulty: 1 Easy
Topic: A Simple Naive Forecasting Model
Learning Objective: 1-07 Describe the naive forecasting method.
Accessibility: Keyboard Navigation
Gradable: automatic
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