Business Forecasting 6th Edition By Wilson – Test Bank

Chapter 10

MULTIPLE CHOICE TEST BANK

Note:  The correct answer is denoted by **.

1. Which of the following is important if forecasting is to have the desired positive effect on decisions?

1. A) Communication between forecast staff and management.
2. B) Ranges of forecasts are reported to management.
3. C) Forecast combination is examined.
4. D) Forecast presentations should not be overly technical.
5. E) All of the above.  **

2. Which of the following is not an important role played by time in the forecast process?

1. A) Determining the forecast horizon.
2. B) Determining the forecast method.
3. C) Determining the forecast urgency.
4. D) Determining the relevancy of forecast errors.  **
5. E) All of the above.

3. For the forecasting process to be effective, internal data should be

1. A) kept on an annual basis.
2. B) highly aggregated.
3. C) sampled once a year.
4. D) highly disaggregated.  **
5. E) None of the above.

4. In preparing the actual forecast numbers, the forecast staff should

1. A) prepare a range of possible forecasts.
2. B) prepare forecast intervals.
3. C) prepare forecasts using different methods.
4. D) examine combined forecasting methods.
5. E) All of the above.  **

5. Forecast errors

1. A) are inevitable, so discard them.
2. B) are inevitable, so they are not worth discussing with management.
3. C) are useful to the extent that they contain valuable information.  **
4. D) will get you fired!
5. E) None of the above.

6. Which of the following methods requires technical expertise in the area of survey methods?

1. A) Sales force composites.
2. B) Customer Surveys.  **
3. C) Jury of Executive Opinion.
4. D) Delphi
5. E) All of the above.

7. Which of the following models cannot be applied to seasonal data?

1. A) Winter’s smoothing.
2. B) Regression-based trend with seasonal dummies.
3. C) Modified naive models.
4. D) ARIMA models.
5. E) None of the above.  **

8. Which of the following models does not require stationary data?

1. A) Simple Exponential Smoothing.
2. B) Time Series Decomposition.  **
3. C) Adaptive Response Rate Smoothing.
4. D) Moving Averages.
5. E) All the above.

9. Which of the following models are not generally the best to use when generating short-term forecasts?

1. A) Naive methods.
2. B) Moving averages.
3. C) Simple exponential smoothing.
4. D) Consumer Surveys.  **
5. E) All of the above.

10. Which forecasting model is most likely to appear as a “black box” to management?

1. A) Time series decomposition.
2. B) Winter’s smoothing.
3. C) Causal regression.
4. D) ARIMA models.  **
5. E) Linear trend regression.