Free Practice Quiz Question List

5 Forecasting for Operations Online Quiz Questions

Use this free practice quiz with 20 questions to review 5 Forecasting for Operations, test your knowledge, and prepare for your next test or exam.

20 questions

True or false

1 point

True or false: A demand forecast is a guaranteed sales result that operations managers should treat as a target.

A
True
B
False

Fill in the blank

1 point

A retailer uses a seasonal naïve method to forecast demand for a particular week. It bases the forecast on .

Choose one

1 point

A company is launching a product with little relevant demand history. Which forecasting approach is most appropriate to consider?

A
Use a moving average of the product's recent demand, even though there are no relevant observations.
B
Use a structured judgmental approach, such as expert estimates or customer surveys, and document its assumptions.
C
Use a seasonal naïve method based on the product's matching period last year, even though the product is new.
D
Choose whichever method has the smallest error on the new product's historical test data.

Choose all

1 point

Which activities can demand forecasts support in operations? Select all correct choices.

A
Estimating replenishment needs and assessing stockout or excess-stock risk
B
Planning production output, equipment use, or capacity
C
Anticipating workload to arrange staffing and schedules
D
Coordinating purchasing, production, and transport plans with supply-chain partners
E
Guaranteeing that actual demand will match the forecast

True or false

1 point

True or false: A manager should add judgment to a statistical forecast when there is specific, relevant information the model does not already include, such as a confirmed promotion.

A
True
B
False

Written response

1 point

What time-related factor, alongside uncertainty, matters when estimating inventory replenishment needs?

Choose one

1 point

A manager is considering mean absolute percentage error (MAPE) to evaluate demand forecasts. Which limitation should the manager keep in mind?

A
It is always expressed in the original demand units and gives large misses no extra influence.
B
It measures average signed error, so it directly reports whether forecasts tend to be too high or too low.
C
It is undefined when actual demand is zero and may mislead when actual demand is close to zero.
D
It can be calculated only when demand is strongly seasonal.

Fill in the blank

1 point

Using the convention $e_t = \text{actual demand}_t - \text{forecast}_t$ , a positive forecast error means .

Written response

1 point

For three periods, actual demand was $12$ , $18$ , and $20$ units, while forecasts were $10$ , $21$ , and $17$ units. What was the mean absolute error? Enter the value in units; an exact fraction is acceptable.

Choose one

1 point

A product's demand is strongly affected by price and promotions, and the company can estimate their values for the planning period. Which forecasting approach should it consider?

A
Use a causal or regression model that relates demand to the relevant drivers.
B
Use only a seasonal naïve method, regardless of the drivers or seasonal pattern.
C
Use a moving average because it directly estimates the future values of price and promotion.
D
Avoid quantitative methods because relevant drivers can never be included in a demand model.

Choose all

1 point

A team is comparing forecasts for a time-series demand problem. Which evaluation practices are appropriate? Select all correct choices.

A
Fit on earlier periods and test on later periods, or move the training window forward over time.
B
Compare methods at the forecast horizon used in practice.
C
Review results by product, location, or period when aggregate scores could conceal local problems.
D
Randomly shuffle all periods before splitting the data so the test set includes a representative mix of past and future.

Written response

1 point

Using $e_t = \text{actual demand}_t - \text{forecast}_t$ , actual demand and forecast were $102$ and $100$ , $95$ and $100$ , and $110$ and $105$ , respectively. What was the mean error? Enter a signed value in units; an exact fraction is acceptable.

Choose one

1 point

Two forecasting methods have similar average error, but under-forecasting could cause costly lost sales while over-forecasting could create excess inventory. What should the manager do when using the forecasts to make an operating decision?

A
Always select the method with the lowest average error, regardless of the consequences of being too high or too low.
B
Consider the consequences of under- and over-forecasting for the decision, along with forecast accuracy.
C
Treat over-forecasting as harmless because it cannot affect operations.
D
Choose the forecast that exactly matches a sales target, even if its uncertainty is high.

Open ended

1 point

A distribution company wants to compare methods for forecasting weekly demand for one product at several warehouses. Describe a practical evaluation plan that would help it choose a method for use in operations.

Choose one

1 point

A service manager needs to estimate workload for each shift next week and arrange the appropriate number of employees. Which operational use of demand forecasts most directly supports this decision?

A
Estimate replenishment needs and the risk of excess stock
B
Anticipate workload by shift and arrange labor
C
Plan equipment use and long-term production capacity
D
Coordinate purchasing and transport plans with suppliers

Choose one

1 point

A company is launching a product with no relevant demand history. Which approach is most suitable for producing an initial forecast?

A
Use a seasonal naïve method because the matching season's demand is known
B
Use exponential smoothing because it can represent trend and seasonality
C
Use a judgmental method, documenting assumptions and applying judgment systematically
D
Use a causal model with drivers even if their future values are unavailable

True or false

1 point

Using the convention that forecast error equals actual demand minus forecast, a positive forecast error means demand was under-forecast.

A
True
B
False

Written response

1 point

For one period, actual demand is 145 units and the forecast is 130 units. Using the convention $e_t = \text{actual demand}_t - \text{forecast}_t$ , what is the forecast error?

Choose one

1 point

A product has zero actual demand in one test period. What is true of MAPE for that period?

A
MAPE is undefined for that period because its denominator is zero.
B
MAPE is necessarily zero because actual demand is zero.
C
MAPE is expressed in the original demand units for that period.
D
MAPE can be calculated only if the forecast is also zero.

Choose one

1 point

A team is evaluating a demand-forecasting method on time-series data. Which split best preserves the chronological order needed for a realistic test?

A
Randomly mix all periods before assigning them to fitting and testing
B
Fit on later periods and test on earlier periods
C
Fit and test on the same periods to ensure a fair comparison
D
Fit on earlier periods and test on later periods