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FORECASTING- Old Exam Questions

FORECASTING- Old Exam Questions - FORECASTING OLD EXAM...

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FORECASTING OLD EXAM QUESTIONS (The answer key is at the end of this document.) A manager has been using a certain technique to forecast demand for a certain word processing software package. Actual demand and his corresponding predictions are shown below: Month Actual Demand Manager’s Forecast January 40 40 February 45 40 March 60 50 April 44 50 May 46 40 Answer the following four questions, based on this information. 1. What was his forecast error in February? a) 0 b) -5 c) 5 d) -6 e) 6 2. What is the mean error (ME) for these five months of forecasting? 3. What is the mean absolute deviation (MAD) for these five months of forecasting? 4. If the manager had used a simple two month moving average to forecast this demand, which of the following statements are true? I. The two month moving average forecast would have been more accurate in the month of April than the original manager’s forecast provided in the table above. II. The two month moving average forecast for May would have been 52. III. The two month moving average forecast for May would have been higher than actual May demand, whereas the original manager’s forecast provided above was lower than actual May demand.
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