ECON 3050 Spring 2015 (Worth 25 points) Name........................................... Circle the correct answers: 1. Forecasting is a statistical technique that is increasingly and decisively getting unpopular within the business community. a. True b. False 2. What is true about forecasting? a. It is based on the same underlying causal assumptions that prevailed in the past b. It is never perfect c. Forecasting about a group is more accurate than an individual d. All of the above 3. Which one is NOT a qualitative forecast? a. Executive opinions b. Sales force opinions c. Time- series forecast d. All of the above 4. What are the steps in forecasting process? a. Determine the purpose of forecasting b. Select time horizon c. Establish a technique d. All of the above 5. What is not an element of a good forecast? a. Timeliness b. Accuracy c. Mobility d. Simplicity 6. Associative model forecasting may use explanatory variable(s) to predict future variable. a. True b. False 7. Time series forecast cannot project patterns identified in recent time series observations a. True b. False 8. Judgment forecasts uses subjective inputs such as opinions from a. Consumer surveys b. Sales staff c. Managers d. All of the above 9. Which is NOT an element of a time series data? a. Trend b. Seasonality c. Cyclical variation d. Data perfection 10. Irregular variation in time series is caused by unusual circumstances not reflective of typical behavior. a. True b. False 11. Random variations in time series are residuals after all other behavior are accounted for a. True b. False 12. Diffusion model of forecasting takes into account market potential, mass media, word of mouth etc. a. True b. False 13. In weighted moving average method more recent values are given less weight in computing a forecast a. True b. False 14. Exponential smoothing is a weighted averaging method that is still relatively easy to use and understand a. True b. False 15. Focus forecasting is NOT in fact a new method. It rather chooses the best method among moving average, weighted moving average, and exponential smoothing. a. True b. False 16. Forecast accuracy increases as time horizon gets longer. a. True b. False 17. Forecast can be made based on ..................... a. Judgment b. Time series c. Associative model d. All of the above 18. Delphi method of forecasting is an iterative process which puts emphasis on the consensus of managers and staff in question. a. True b. False 19. Naive method of forecasting is based on a % of past forecast error. a. True b. False 20. Cyclical fluctuations in time series is NOT related to upswing and downswing of business activities a. True b. False 21. Least squares line maximizes the sum of squares vertical deviations around the estimated line. a. True b. False 22. A linear trend equation may be developed for forecasting when trend is present in data. a. True b. False 23. Judgment forecasting models are produce more accurate outcomes than those of quantitative models. a. True b. False 24. In Exponential smoothing, we use a. Previous forecast as a base b. A % of the previous forecast error as adjustment factor c. Both a and b d. None of the above 25. Monitoring is NOT an important part of forecasting. a. True b. False