Free Practice Quiz Question List

2 Demand Forecasting Online Quiz Questions

Use this free practice quiz with 20 questions to review 2 Demand Forecasting, test your knowledge, and prepare for your next test or exam.

20 questions

True or false

1 point

A demand forecast is an informed estimate, not a guarantee that actual demand will match it. True or false?

A
True
B
False

Choose one

1 point

A retailer replenishes a product every week. Which forecasting setup best matches that decision?

A
Forecast monthly demand and update it only once a year
B
Forecast weekly demand and update it regularly
C
Forecast demand for the next five years and do not revise it
D
Forecast demand only after a stockout occurs

Choose one

1 point

A product's demand has no clear seasonal pattern, but it has changed by an average of about 5 units per month. Which baseline method extends that average change into future periods?

A
Mean method
B
Naïve method
C
Drift method
D
Seasonal naïve method

True or false

1 point

Using the convention that forecast error equals actual demand minus forecast demand, a positive error indicates that demand was underforecast. True or false?

A
True
B
False

Fill in the blank

1 point

In an additive time-series pattern, seasonal effects are roughly in size as the demand level rises or falls.

Choose one

1 point

A period has actual demand of zero. What is true of the percentage error for that period when calculated as part of MAPE?

A
MAPE remains defined and equals zero
B
MAPE is undefined
C
MAPE is always exactly 100%
D
MAPE becomes equal to MAE

Choose all

1 point

Which practices help evaluate demand forecasts realistically? Select all correct choices.

A
Use rolling-origin evaluation so each forecast uses only information available at that time
B
Choose the method with the best fit to all historical observations, without holding any observations back
C
Test forecasts at the horizons that matter for the operational decision
D
Include later outcomes in the information used to make earlier forecasts
E
Compare predictions with actual outcomes that were not used to produce those predictions

Fill in the blank

1 point

MAPE is undefined for a period when actual demand is .

Choose all

1 point

When exploring a demand series, which business-context factors may help explain observed patterns or unusual movements? Select all correct choices.

A
Check whether promotions or price changes may explain movements in demand
B
Check whether holidays may create recurring or unusual demand patterns
C
Assume a forecasting method will automatically account for every supply disruption
D
Consider whether supply disruptions may have affected observed demand
E
Ignore business context if the time series can be plotted

Written response

1 point

For two periods, actual demand is 10 units and 8 units, while the corresponding forecasts are 8 units and 10 units. What is the mean absolute error (MAE), in units?

Open ended

1 point

A buyer has a demand forecast for a product. Explain why the forecast should not automatically become the order quantity, and describe how at least two other operational considerations could inform the replenishment decision.

Choose one

1 point

A forecast has a MASE of 0.8 under a chosen benchmark scaling. What does this result indicate?

A
The forecast is exactly 0.8 demand units too high in every period
B
The forecast's average scaled error is better than the benchmark under the chosen scaling
C
The forecast is guaranteed to be accurate in future periods
D
The forecast has no errors in any period

True or false

1 point

A longer-term rise and fall in demand that does not necessarily recur at a fixed interval is a seasonal pattern.

A
True
B
False

Choose one

1 point

A retailer replenishes a product weekly, while its manufacturer plans capacity several months ahead. Which forecasting setup best supports both decisions?

A
Use a monthly forecast for every decision so forecasts are comparable.
B
Use weekly forecasts for weekly replenishment and a longer horizon for capacity planning.
C
Forecast only the next period, even when the decision concerns months ahead.
D
Choose the horizon based on which forecast method is easiest to calculate.

Choose one

1 point

A product had a stockout during several periods, and recorded sales fell during those periods. What is the most appropriate data-preparation response before forecasting?

A
Treat all recorded sales as exact demand because sales are observed directly.
B
Increase recorded demand in every period by the same fixed amount.
C
Flag stockout periods because sales may understate customer demand.
D
Delete every period with low sales, since it must reflect a stockout.

Choose one

1 point

A product's usual demand rises over several years, and its busy-season increase grows in proportion to that higher level. Which description best fits this pattern?

A
A multiplicative pattern, because seasonal swings grow in proportion to the demand level.
B
An additive pattern, because seasonal swings grow in proportion to the demand level.
C
A cycle, because every seasonal pattern is a long-term rise and fall without a fixed interval.
D
Random variation, because demand is higher in some months than in others.

Choose one

1 point

A planner wants to test how a forecasting process would have performed in actual use over time. Which evaluation approach best avoids using future information?

A
Fit the model using the entire series, then compare fitted values with the same observations.
B
At successive time points, use only data available then to forecast later observations.
C
Randomly shuffle all observations, then use part of each period to forecast the rest.
D
Choose the model with the smallest training error, without testing later periods.

Written response

1 point

For monthly demand with yearly seasonality, a planner forecasts next January using demand from the most recent January. Which baseline method is being used?

Written response

1 point

Actual demand was $125$ units and the forecast was $140$ units. Using $e_t=y_t-\hat y_t$ , what is the signed forecast error in units?

Written response

1 point

A retailer’s actual demand exceeds its forecasts in many consecutive periods, rather than in just one unusual event. What forecasting issue should the retailer investigate?