Free Practice Quiz Question List

6 Business Forecasting Online Quiz Questions

Use this free practice quiz with 20 questions to review 6 Business Forecasting, test your knowledge, and prepare for your next test or exam.

20 questions

Written response

1 point

Actual sales were 145 units and the forecast was 160 units. Using forecast error = actual value minus forecast, what was the forecast error?

Written response

1 point

A series has 5 observations: its first value was 80 units and its latest value was 100 units. Using the drift method, what is the forecast 2 periods ahead?

Written response

1 point

Which forecast accuracy metric is undefined when an actual value is zero?

Choose one

1 point

A retailer estimates next month's demand at 620 units, sets a target of 700 units, and schedules staff based on both figures. Actual demand is 615 units. Which statement correctly identifies the estimate, target, and staffing schedule, and explains how the estimate should be judged?

A
The 620-unit estimate is a forecast, the 700-unit target is a goal, and the staffing schedule is a plan; judge the forecast by how well it anticipates actual demand, not by whether it matches the target.
B
The 620-unit estimate is a goal because it was used to guide staffing; judge it by whether it matches the 700-unit target.
C
The 620-unit estimate is a plan because it concerns a future period; judge it by whether the staffing schedule uses it.
D
The 620-unit estimate is accurate only if actual demand equals the 700-unit target.

True or false

1 point

A point forecast is often best considered alongside a prediction interval, and forecasts farther into the future are generally more uncertain.

A
True
B
False

Choose one

1 point

A retailer's sales rise each December and fall afterward, with this pattern recurring each year. Which time-series pattern best describes the recurring rise?

A
A cycle, because it is tied to the calendar.
B
Irregular variation, because sales are not constant.
C
Seasonality, because the increase recurs in the same month each year.
D
A trend, because one month has higher sales.

Choose one

1 point

A business's monthly sales have a persistent yearly seasonal pattern. It wants to forecast next October using the latest observed value from an October. Which baseline method fits this approach?

A
Mean method, using the average of all observed months.
B
Naïve method, using the latest observed month for every forecast.
C
Seasonal-naïve method, using the latest observation from the matching month.
D
Drift method, extending the average change from the first to the last observation.

Choose one

1 point

A forecast evaluation includes one unusually large miss among otherwise small errors. Which measure gives that large miss relatively more influence: MAE or RMSE?

A
MAE, because it squares each error before averaging.
B
RMSE, because squaring errors makes large misses count more heavily.
C
MAE and RMSE give large misses exactly the same extra weight.
D
Neither; only MAPE gives more weight to large misses.

Choose one

1 point

A nonseasonal series has a forecast MASE of 0.8. What does this result indicate about the forecast's average absolute error relative to the simple naïve benchmark's scaled error?

A
The forecast has a larger average absolute error than the naïve benchmark.
B
The forecast's average error is exactly zero.
C
The forecast's average absolute error is smaller than the benchmark's scaled error.
D
The forecast is guaranteed to outperform the benchmark in every future period.

Choose one

1 point

For one period, actual sales were $84$ units and the forecast was $90$ units. Using $e_t = y_t - \hat{y}_t$ , what was the forecast error?

A
$-6$ units
B
$+6$ units
C
$174$ units
D
$-174$ units

Written response

1 point

The last four monthly observations were $100$ , $110$ , $120$ , and $130$ units. Using the drift method, whose forecast is $\hat{y}_{T+h|T} = y_T + h\frac{y_T-y_1}{T-1}$ , what is the forecast for the next month? Enter your answer in units.

Choose one

1 point

A forecasting team evaluates a method at several forecast origins, fitting with the data available at each origin and comparing forecasts with later actuals. What is the main benefit of this rolling-origin evaluation?

A
It randomly shuffles observations to create several independent training sets.
B
It tests forecasts from several points in time to see whether results depend on one favorable period.
C
It fits forecasts using future observations so that all origins use the same information.
D
It replaces actual outcomes with the model's residuals.

Choose one

1 point

An analyst has weekly demand data and wants to estimate demand for the next four weeks. Which approach best tests forecast performance without allowing future information into model development?

A
Train on the earliest observations and test on the most recent observations.
B
Randomly shuffle all weeks, then split the shuffled data into training and test sets.
C
Train on the most recent observations and test on the earliest observations.
D
Fit the model to all observations and evaluate it on those same observations.

Choose all

1 point

Select all statements supported by the distinction between forecast errors and residuals.

A
Forecast errors are evaluated on observations not used to make the forecasts.
B
Residuals are calculated on data used to fit a model.
C
Small residuals by themselves show that a method will forecast well.
D
Forecast errors and residuals are interchangeable names for the same evaluation.

Choose all

1 point

A retailer is preparing monthly revenue data for forecasting. Select all useful checks to perform before choosing a forecasting method.

A
Plot the observations over time to look for visible patterns.
B
Check that the time intervals are consistent.
C
Inspect for missing values, unusual events, or changes in how data were recorded.
D
Randomly shuffle the observations before examining their time pattern.

True or false

1 point

True or false: A more elaborate forecasting method is useful only if it performs better than a simple baseline on data that was not used to construct the forecast.

A
True
B
False

True or false

1 point

True or false: One unusually high sales week is enough evidence to conclude that a business has a sustained upward trend.

A
True
B
False

Fill in the blank

1 point

A business's sales fluctuate around a stable level. Under the mean method, the forecast for each future period is the of all observations available so far.

Fill in the blank

1 point

A manager wants an accuracy measure that communicates the typical absolute forecast miss in a directly interpretable way. MAE reports that miss in the series' .

Open ended

1 point

A store manager needs a forecast of weekly units sold to support staffing decisions. Recommend an accuracy measure and explain how the manager should evaluate a new forecasting method against a simple baseline.