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Practice Questions Forecasting

# Practice Questions Forecasting - Practice Questions...

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Practice Questions – Forecasting 1. Which would you rather use for a short to medium term forecast? a. Moving average b. Delphi Ans. a (Delphi is for the long term - remember past data cannot be stretched too much into the future, so methods such as regression and moving averages should not be used for long term forecasting)) 2. My client likes an easily understood and a relatively useful measure of forecasting error. Which one would you choose? a. MAPE b. MSE c. CFE Ans. a (states error as a % of actual demand) 3. What’s r-square? Ans. The proportion of variance explained in the dependent variable by all the independent variables combined. 4. Abnormally heavy rains (now stopped) in Mexico caused a spike in sales of waterproofing materials. If the company uses an exponential smoothing model for forecasting sales for the product, what should you do to make your forecast more accurate? F t+1 = α D t + (1- α ) F t a. increase value of alpha b. decrease value of alpha c. do nothing Ans. b (because it’s a random unpredictable event & you don’t want it to bias your forecast in normal times)

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5. You have just developed the following multiple regression equation (all tests results
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Practice Questions Forecasting - Practice Questions...

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