Forecasting questions - RSM 270 L0101/L0201/L0301 Midterm...

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RSM 270 L0101/L0201/L0301 Midterm Examination 2015 Winter Term 2. Forecasting [15 minutes] (18 points) (a) (3 points) What is a major advantage of the Delphi Method compared to the Panel Consensus? Solution: Every member can fill in the questionnaire independently without being influenced or being under pressure by his/her boss. Employees might be afraid to give their true opinion when their boss has a different opinion. (b) (4 points) Look at the following time series. Would an exponential smoothing forecast with α = 0 . 2 provide a better forecast than a forecast with α = 0 . 6? Why or why not? And would a 3-week or a 6-week moving average forecast provide a better fore- cast? Why or why not? Solution: Because there is a clear trend, (1 point) it will be better to give a high weight to the most recent observation and less weight to older ob- servations. Therefore, it is better to have a high value of (i.e., α = 0 . 6) (1 point) 6-week considers too many old data and lacks behind (1 point).
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  • Fall '13
  • Time series analysis

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