True/False Questions 1) Qualitative forecasting methods are most appropriate when there is good historical data available or when experts do not have market intelligence that is critical in making the forecast. Answer: 2) Time series forecasting methods are the most difficult methods to implement.

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3) The moving average forecast method is used when demand has an observable trend or seasonality. Answer:

4) The =MAPE(array1,array2) function in Excel can calculate the mean absolute percent error of any two data arrays of the same size.

Answer: 5) The forecast error measures the difference between the forecast and the estimate..

6) The disadvantage of building up inventory during the off season to keep production stable year round is the expensive capacity that would go unused during most months when demand was lower. Answer:

7) A firm that uses flexible work hours from the workforce to manage capacity to better meet demand is using a seasonal workforce.

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8) Scheduling the workforce so that the available capacity better matches demand is using time flexibility from the workforce. Answer:

9) In general, as the fraction of increased demand coming from forward buying grows, offering the promotion during the peak demand period becomes more attractive. Answer: 10) As forward buying becomes a smaller fraction of the demand increase from a promotion, it is less profitable to promote during the peak period. Answer: 11) Promoting during a peak demand month may decrease overall profitability if a significant fraction of the demand increase results from a forward buy.

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