Sample Test for Forecasting (46pts total)
Name_________________________________
ID ___________________________________
I. Multiple Choices and True/False (24pts, 2pts each)
______ The forecast for the student enrollment of the
whole WSU is usually more accurate than that of the
business school (CBE).
______ If TS = -3.5, we may conclude with 98%
confidence that the current forecast method
a. under-forecast and should be replaced
b. over-forecast and should be replaced
c. performs well and should not be replaced.
______ Trend projection method is in general a better
method than the Naïve method.
______ Which of the following forecasting measures
allows you to measure the direction (over or under
forecast) of a forecasting method?
a. Bias b. MAD c. MSE d. MAPE
e. all of the above
______ Which of the following methods would be
most appropriate to forecast the monthly salmon
population going through the Lower Granti Dam on
the Snake River?
a. smoothing methods b. trend projection
c. causal forecasting d. qualitative methods
e. decomposition of time series
______ The seasonal index should always be
positive. If the seasonal index of Spring is larger than
0.5, then we may conclude that the average sales in
Spring are above the average annual sales by 50%.
______ Which of the following quantities associated
with forecasting techniques should always be
positive?
a. RSFE b. MAD c. TS d. Bias
e. Correlation coefficient r
______ If a data set has a clear increasing trend,
which is the correct order of the following three
forecasting methods, from the best to the worst?
 Trend Projection (TP),
 Naïve,
 Exponential Smoothing with = .2 (EXP),
a. TP, Naive, EXP b. Naive, TP, EXP
c. TP, EXP, Naive d. Naive, EXP, TP
e. EXP, Naive, TP
______ Recall the apartment rental example we
practiced in class. The correlation coefficient
between the apartment rentals and the ads placed in
the previous month is 0.9. As a result, we concluded
that 81% of the rental changes can be attributed to the
advertisement changes.
II. Calculations (22pts):
 CARRY TO 2 DECIMAL POINT FOR ALL
CALCULATIONS!
 SHOW DETAILED CALCULATION WORK!
 Formula:
Ft+1 = Yt + (1-) Ft = Ft + (Yt - Ft), Y=a+b*X
Problem 1 (10pts) Demands for the past 3 months
have been
Month
1
2
3
Demand
1
2
5
a. _______ (3pts) Forecast the demand of month 4 by
the exponential smoothing method with  = 0.3 and
F2 = 2. Show your calculations here:
______ In the decomposition of time series method,
the deseasonized data is obtained by dividing the
original data by the corresponding seasonal index.
______ Which of the following is NOT considered as
a qualitative forecasting method?
a. The jury of executive opinion
b. The Delphi method
c. The sales force composite
d. Causal method
e. Consumer survey
______ The forecast made by an exponential
smoothing method is also a weighted average of the
past data. In addition, the larger the smoothing
constant , the less responsive the method is to the
data change.
b. (3pts) To forecast the demand of month 4 by trend
projection, what are X’s , Y’s, and n in the formula
for a and b?
X1 = ________, X2 = ________, X3 = ________
Y1 = ________, Y2 = ________, Y3 = ________
n = ________
The demand forecasts by two methods, A and B, are
given in the following table
Month
1
2
3
Demand
1
2
4
Forecast by A
2
3
2
Forecast by B
3
3
5
a. ______ (2pts) Which method is better based on
Bias?
Show your calculations:
c. (4pts) Suppose the data in the following table are
deseasonalized data (assuming the calculation is
correct, which is not). Provide X’s, Y’s, and n for the
trend projection step in the decomposition of time
series method.
Spring
Summer
Fall
Winter
2002
81
87
83
84
2003
84
87
89
88
n = ______
b. ______(2pts) Which method is better based on
MAPE?
Show your calculations:
X1 = ________
X2= ________
X3= ________
X4= ________
X5= ________
X6= ________
X7= ________
X8= ________
Y1 = ________
Y2 = ________
Y3 = ________
Y4 = ________
Y5 = ________
Y6 = ________
Y7 = ________
Y8 = ________
d. ______ (3pts) Based on the trend projection
method using the above data, Joe found out the
intercept = 79 and the slope = 1.2. Let us assume his
calculation is correct. Help Joe to forecast the
attendance for Summer of 2004.
Problem 2 (12pts) Attendance at Orlando’s newest
Disney-like attraction, Vacation World, has been as
follows in 2002 and 2003:
Spring
Summer
Fall
Winter
2002
90
70
100
60
2003
110
90
120
80
a. ________ (3pts) Calculate the seasonal index for
the Summer season. Show your calculations here.
b. ________ (2pts) Calculate the deseasonalized data
for the Summer 2002. Show your calculations here: