An operation analyst is forecasting this year’s demand for one of his company’s products based on the following historical data:
Year # sold
4 years ago 10,000
3 years ago 12,000
2 years ago 18,000
Last year 20,000

1) What is the forecast for this year using the last-value forecasting method?

a) 22,000
b) 20,000
c) 18,000
d) 15,000
e) 12,000

2) What is the forecast for this year using a moving-average forecast based on the last four years?

a) 22,000
b) 20,000
c) 18,000
d) 15,000
e) 12,000

3) Which of the following possible values of  would cause exponential smoothing to respond the most quickly to forecast errors?

a) 0
b) 0.01
c) 0.05
d) 0.1
e) 0.15

The business analyst for Ace Business Machines, Inc. wants to forecast this year’s demand for manual typewriters based on the following historical data:

Time Period Demand
5 years ago 900
4 years ago 700
3 years ago 600
2 years ago 500
Last year 300

4) What is the forecast for this year using the last-value forecasting method?

a) 163
b) 180
c) 300
d) 467
e) 510

5) In exponential smoothing with trend, the forecast consists of:

a) an exponentially smoothed forecast and a smoothed trend factor.
b) the old forecast adjusted by a trend factor.
c) the old forecast and a smoothed trend factor.
d) a moving-average and a trend factor.
e) None of the above.