Question

1 Which of the following statements is TRUE regarding time series forecasting methods?

a Moving average (MA) method is appropriate for forecasting an item that shows seasonal pattern

b By assigning larger weight to the most recent period data, weighted moving average (WMA) method is more reflective to the changes in the most recent period of data than MA method

c Simple exponential smoothing method is NOT appropriate for forecasting stable item without trend

d Linear trend line method is able to reflect changes of trends in data

2 Longer-period moving averages method react more slowly to recent data value changes than do shorter-period moving averages method.

a True

b False

3 A relatively large positive value of cumulative error E, usually indicates forecasts are probably consistently lower than the actual data values

a True

b False

4 Which of the following statements is FALSE regarding basic patterns found in a forecasting item?

a Random variations are not predictable and follow no pattern

b The sales of holiday decoration often display seasonable pattern

c Cycle and seasonal patterns primarily differ in if the up and down movement of the item being repetitive

d An item may exhibit multiple basic patterns at the same time

5 Which of the following statements is FALSE regarding certain forecasting methods?

a Time series methods assume what has occurred in the past will continue to occur in the future

b Time series methods use both historical data and knowledgeable individualsâ opinions to make forecast

c Regression methods attempt to derive mathematical relationships between the forecasting item and other variables that may have impact on it

d Qualitative methods use knowledgeable individualsâ judgement, expertise and opinions to make forecast

6 When using the simple exponential smoothing method to forecast, the closer weighting factor alpha is to ________, the greater reaction to the changes of data value

a -1

b 0

c .5

d 1

7 Which of the following statements is FALSE regarding certain measurements of forecasting errors?

a With regards to the same data set, a forecasting method that has the lowest mean absolute deviation (MAD), also has the lowest mean absolute percent deviation (MAPD)

b As long as a forecasting method results in an average error being zero, the forecast method is the most accurate of all

c MAPD eliminates the drawback of MAD that view MAD alone cannot sufficiently assess the accuracy of a forecast

d When comparing the accuracy of different forecasting methods with regards to the same data set, MAD is a better option than cumulative error and average error

Answer 1

1. b By assigning larger weight to the most recent period data, weighted moving average (WMA) method is more reflective to the changes in the most recent period of data than MA method

   2

   a True

   3

   b False

   4

   c Cycle and seasonal patterns primarily differ in if the up and down movement of the item being repetitive

   5

   a Time series methods assume what has occurred in the past will continue to occur in the future

   6

   d 1

   7

   d When comparing the accuracy of different forecasting methods with regards to the same data set, MAD is a better option than cumulative error and average erro