Q&A Hero

Q: When new products or services are introduced, focus forecasting models are an attractive option.

Q: Organizations that are capable of responding quickly to changing requirements can use a shorter forecast horizon and therefore benefit from more accurate forecasts.

Q: Forecasts help managers both to plan the system itself and to provide valuable information for using the system.

Q: Forecasts for groups of items tend to be less accurate than forecasts for individual items because forecasts for individual items don't include as many influencing factors.

Q: Once accepted by managers, forecasts should be held firm regardless of new input since many plans have been made using the original forecast.

Q: For new products in a strong growth mode, a low alpha will minimize forecast errors when using exponential smoothing techniques.

Q: Forecasting techniques generally assume an existing causal system that will continue to exist in the future.

Q: Data on the last three years of demand are available as follows: What is this year's seasonally adjusted forecast for each season?

Q: Data on demand over the last few years are available as follows: What is this year's forecast using trend-adjusted (double) smoothing with alpha = .2 and beta = .1, if the forecast for last year was 56, the forecast for two years ago was 46, and the trend estimate for last year's forecast was 7?

Q: Data on demand over the last few years are available as follows:

Q: A manager uses this equation to predict demand: Yt = 20 + 4t. Over the past eight periods, demand has been as follows. Are the results acceptable? Explain.

Q: Demand for the last four months was:

Q: Develop a linear trend equation for the data on bread deliveries shown below. Forecast deliveries for period 11 through 14.

Q: Given the following data, develop a linear regression model for y as a function of x.

Q: Given the following data, develop a linear regression model for y as a function of x.

Q: Use linear regression to develop a predictive model for demand for burial vaults based on sales of caskets.

Q: Given the data below, develop a forecast for period 6 using a four-period weighted moving average and weights of .4, .3, .2 and .1. .

Q: A CPA firm has been using the following equation to predict annual demand for tax audits: Yt = 55 + 4t. Demand for the past few years is shown below. Is the forecast performing as well as it might? Explain.

Q: A manager has been using a certain technique to forecast demand for gallons of ice cream for the past six periods. Actual and predicted amounts are shown below. Would a naive forecast have produced better results?

Q: Over the past five years, a firm's sales have averaged 250 units in the first quarter of each year, 100 units in the second quarter, 150 units in the third quarter, and 300 units in the fourth quarter. What are appropriate quarter relatives for this firm's sales? Hint: Only minimal computations are necessary.

Q: A manager is using the equation below to forecast quarterly demand for a product: Yt = 6,000 + 80t where t = 0 at Q2 of last year Quarter relatives are Q1 = .6, Q2 = .9, Q3 = 1.3, and Q4 = 1.2. What forecasts are appropriate for the last quarter of this year and the first quarter of next year?

Q: A manager is using exponential smoothing to predict merchandise returns at a suburban branch of a department store chain. Given a previous forecast of 140 items, an actual number of returns of 148 items, and a smoothing constant equal to .15, what is the forecast for the next period?

Q: Consider the data below: Using exponential smoothing with alpha = .2, and assuming the forecast for period 11 was 80, what would the forecast for period 14 be?

Q: Develop a forecast for the next period, given the data below, using a three-period moving average.

Q: Which of the following is the most valuable piece of information the sales force can bring into forecasting situations? A. what customers are most likely to do in the future B. what customers most want to do in the future C. what customers' future plans are D. whether customers are satisfied or dissatisfied with their performance in the past E. what the salesperson's appropriate sales quota should be

Q: Which of the following would tend to decrease forecast accuracy? A. a reduction in demand variability B. a shortening of the forecast time horizon C. an attempt to forecast demand for a group of similar items rather than an individual item D. a change in the underlying causal system

Q: Which of the following helps improve supply chain forecasting performance? A. contracts that require supply chain members to formulate long-term forecasts B. penalties for supply chain members that adjust forecasts C. sharing forecasts or demand data across the supply chain D. increasing lead times for critical supply chain members E. increasing the number of suppliers at critical junctures in the supply chain

Q: Which of the following changes would tend to shorten the time frame for short-term forecasting? A. bringing greater variety into the product mix B. increasing the flexibility of the production system C. ordering fewer weather-sensitive items D. adding more special-purpose equipment E. investing in the production system to make it more task-specific

Q: Which of the following mechanisms for enhancing profitability is most likely to result from improving short-term forecast performance? A. increased inventory B. reduced flexibility C. higher-quality products D. greater customer satisfaction E. greater seasonality

Q: The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data: What is this month's forecast using the least squares trend line for these data? A. 1,250 B. 128.6 C. 102 D. 158 E. 164

Q: The dean of a school of business is forecasting total student enrollment for this year's summer session classes based on the following historical data: What is this year's forecast using the least squares trend line for these data? A. 3,600 B. 3,500 C. 3,400 D. 3,300 E. 3,200

Q: A concert promoter is forecasting this year's attendance for one of his concerts based on the following historical data: The previous trend line had predicted 18,500 for two years ago, and 19,700 for last year. What was the mean absolute deviation for these forecasts? A. 100 B. 200 C. 400 D. 500 E. 800

Q: Professor Very Busy needs to allocate time next week to include time for office hours. He needs to forecast the number of students who will seek appointments. He has gathered the following data: What is this week's forecast using trend-adjusted (double) smoothing with alpha = .5 and beta = .1, if the forecast for last week was 65, the forecast for two weeks ago was 75, and the trend estimate for last week's forecast was -5? A. 49.3 B. 50.6 C. 51.3 D. 65.4 E. 78.7

Q: The business analyst for Video Sales, Inc. wants to forecast this year's demand for DVD decoders based on the following historical data: What is the forecast for this year using trend-adjusted (double) smoothing with alpha = .3 and beta = .2, if the forecast for last year was 310, the forecast for two years ago was 430, and the trend estimate for last year's forecast was -150? A. 162.4 B. 180.3 C. 301.4 D. 403.2 E. 510.0

Q: A company has introduced a process improvement that reduces processing time for each unit; output is increased by 25 percent with less material, but one additional worker is required. Under the old process, five workers could produce 60 units per hour. Labor costs are $12/hour, and material input was previously $16/unit. For the new process, material is now $10/unit. Overhead is charged at 1.6 times direct labor cost. Finished units sell for $31 each. What increase in productivity is associated with the process improvement?

Q: The weekly output of a production process is shown below, together with data for labor and material inputs. The standard inventory value of the output is $125 per unit. Overhead is charged weekly at the rate of $1,500 plus .5 times direct labor cost. Assume a 40-hour week and an hourly wage of $16. Material cost is $10 per running foot. What is the average multifactor productivity for this proc

Q: Suppose a country's productivity last year was 84. If this country's productivity growth rate of 5 percent is to be maintained, this means that this year's productivity will have to be: A. 88.2. B. 79.8. C. 82.8. D. 78.9. E. 4.2.

Q: Which of the following factors would tend to reduce productivity? A. improvements in workplace safety B. reductions in labor turnover C. more inexperienced workers D. reductions in the scrap rate E. less variety in the product mix

Q: ___________ is generally used to facilitate an organization strategy that emphasizes low cost. A. Speed to market B. Flexibility C. Customization D. Sustainability E. Standardization

Q: Increasing the service offered to the customer makes it more difficult to compete on the basis of: A. order qualifiers. B. customization. C. quality. D. price. E. flexibility.

Q: For firms competing in worldwide markets, conducting __________________ is more complex, since what works in one country or region might not work in another. A. productivity analysis B. environmental analysis C. strategy implementation D. sustainability analysis E. growth forecasting

Q: Years ago in the overnight delivery business, providing package tracking capability gave some firms a competitive advantage. Now, all firms must offer this capability simply to be in this line of business. This is an example of ______________ becoming ____________ over time. A. tactical implications; strategic B. strategic implications; tactical C. order winners; order qualifiers D. profitability factors; productivity factors E. order qualifiers; order winners

Q: Unique attributes of firms that give them a competitive edge are called: A. functional strategies. B. Balanced Scorecards. C. supply chains. D. core competencies. E. sustainable initiatives.

Q: A firm pursuing a strategy based on customization and variety will tend to structure and manage its supply chain to accommodate more _____________ than a firm pursuing a strategy based on low cost and high volume. A. variation B. streamlined flow C. quality D. capacity E. productivity

Q: The Balanced Scorecard is a useful tool for helping managers translate their strategy into action in the following areas: A. Sustainability; Flexibility; Efficiency; Technology B. Customers; Financial; Internal Business Processes; Learning and Growth C. Customization; Standardization; Efficiency; Effectiveness D. The Environment; The Community; Suppliers; Other Stakeholders E. Strategy; Tactics; Productivity; Profitability

Q: The weekly output of a fabrication process is shown below, together with data for labor and material inputs. Standard selling price is $125 per unit. Overhead is charged weekly at the rate of $1,500 plus .5 times direct labor cost. Assume a 40-hour week and an hourly wage of $16. Material cost is $10 per foot. What is the average multifactor productivity? A. 1.463 B. 1.457 C. 1.431

Q: Gourmet Pretzels bakes soft pretzels on an assembly line. It currently bakes 800 pretzels each eight-hour shift. If the production is increased to 1,200 pretzels each shift, then productivity will have increased by: A. 50 percent. B. 33 percent. C. 25 percent. D. 67 percent.

Q: Which of the following is not a key factor of competitiveness? A. price B. product differentiation C. flexibility D. after-sale service E. size of organization

Q: The manager of a carpet store is trying to determine the best installation crew size. He has tried various crew sizes with the results shown below. Based on productivity, what crew size do you recommend? A. 2 B. 3 C. 4

Q: Which of the following is not a reason for poor performance of our organization in the marketplace? A. placing too much emphasis on product/service design and too little on process design B. failing to take into account customer wants and needs C. putting too much emphasis on short-term financial performance D. taking advantage of strengths/opportunities, and recognizing competitive threats E. failing to monitor the external environment

Q: In an assembly operation at a furniture factory, six employees assembled an average of 450 standard dining chairs per five-day week. What is the labor productivity of this operation? A. 90 chairs/worker/day B. 20 chairs/worker/day C. 15 chairs/worker/day D. 75 chairs/worker/day E. 60 chairs/worker/day

Q: The external elements of SWOT analysis are: A. strengths and weaknesses. B. strengths and threats. C. opportunities and threats. D. weaknesses and opportunities. E. strengths and opportunities.

Q: Time-based approaches of business organizations focus on reducing the time to accomplish certain necessary activities. Time reductions seldom apply to: A. product/service design time. B. processing time. C. delivery time. D. response time for complaints. E. internal audits.

Q: Which of the following is not typically considered a cure for poor competitiveness? A. Remove communications barriers within organizations. B. Minimize attention to the operations function. C. Put less emphasis on short-term financial results. D. Recognize labor as a valuable asset and act to develop it. E. Improve quality.

Q: With regard to operations strategy, organization strategy should, ideally, take into account: A. operations' strengths and weaknesses. B. inventory levels. C. labor productivity. D. product mix. E. production processes.

Q: Core competencies in organizations generally do not relate to: A. cost. B. quality. C. time. D. flexibility. E. sales price.

Q: Which of the following is true? A. Corporate strategy is shaped by functional strategies. B. Corporate mission is shaped by corporate strategy. C. Functional strategies are shaped by corporate strategy. D. External conditions are shaped by corporate mission. E. Corporate mission is shaped by functional strategies.

Q: Value added can be calculated by: A. average productivity gains over time. B. inputs divided by the outputs. C. outputs divided by the inputs. D. input plus output divided by two. E. outputs minus inputs.

Q: A productivity increase in one operation that does not improve overall productivity of the business is not A. worthwhile. B. trivial. C. competence-destroying. D. an order winner. E. an order qualifier.

Q: The fundamental purpose for the existence of any organization is described by its: A. policies. B. procedures. C. corporate charter. D. mission statement. E. bylaws.

Q: The ratio of good output to quantity of raw material input is called A. nondefective productivity. B. process yield. C. worker quality measurement. D. total quality productivity. E. quantity/quality ratio.

Q: For an organization to grow its market share, it must: A. advertise using multimedia. B. reduce prices. C. exceed minimum standards of acceptability for its products or services. D. establish an Internet Web site. E. broaden its mission statement.

Q: Which of the following is not a key step toward improving productivity? A. developing productivity measures for all operations B. improving the bottleneck operations C. establishing reasonable goals for improvement D. considering incentives to reward workers E. converting bond debt to stock ownership

Q: Which of these factors would be least likely to affect productivity? A. methods and technology B. workers C. management D. product mix E. advertising

Q: Which of the following is not a factor that affects productivity? A. computer viruses B. design of the workspace C. use of the Internet D. standardizing processes E. product price

Q: In the 1970s and early 1980s in the United States, organizations concentrated on: A. operations strategies. B. improving quality. C. marketing and financial strategies. D. revising mission statements. E. environmental issues.

Q: Productivity is expressed as: A. output plus input. B. output minus input. C. output times input. D. output divided by input. E. input divided by output.

Q: Scheduling personnel is an example of an operations management: A. mission implementation. B. operational decision. C. organizational strategy. D. functional strategy. E. tactical decision.

Q: Product design and choice of location are examples of _______ decisions. A. strategic B. tactical C. operational D. customer-focused E. design

Q: Competitiveness doesn't include: A. productivity. B. effectiveness. C. profitability. D. operations strategy. E. operations management.

Q: Which of the following would be least important in the pursuit of a time-based strategy? A. cost minimization B. quick changeover times C. operational agility D. reduced complaint resolution times E. flexible technology

Q: An organization's mission statement serves as the basis for: A. environmental scanning. B. core competencies. C. operating procedures. D. distinctiveness. E. organizational goals.

Q: The key to successfully competing is understanding what customers want and then __________ satisfy those wants. A. training production workers to B. finding suppliers who can C. finding the best way to D. designing products and services that E. hiring enough workers to

Q: Which of the following is not among the chief reasons organizations fail? A. overemphasis on short-term financial performance B. emphasizing labor productivity in labor-intensive environments C. poor internal communications D. not investing in capital and human resources E. overemphasis on product (or service) design

Q: Where a firm locates would typically not affect that firm's: A. costs. B. convenience for customers. C. delivery times. D. strategy. E. transportation costs.

Q: Which of the following is least likely to affect the cost an organization incurs in producing its products or services? A. price B. productivity C. location D. quality E. inventory management

Q: The majority of our textbook deals with tactical operations that support established functional strategies.

Q: Traditional strategies of business organizations have tended to emphasize cost minimization or product differentiation.

Q: Standardization has the advantage of reducing variability.

Q: Environmental scanning is a search for events or trends that present either threats or opportunities to the organization.