41. The most commonly used criteria for measuring forecast error is
    

1. 1. Mean absolute deviation
      

   
   
   

   2. Mean absolute percentage error
      

   
   
   

   3. Mean standard error
      

   
   
   

   4. Mean square error

   
   
   

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1. View Hint View Answer Discuss in Forum

   NA

   Correct Option: A

   NA

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42. Which one of the following forecasting techniques is not suited for making forecasts for planning Production schedules in the short range?
    

1. 1. Moving average
      

   
   
   

   2. Exponential moving average
      

   
   
   

   3. Regression analysis
      

   
   
   

   4. Delphi

   
   
   

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1. View Hint View Answer Discuss in Forum

   NA

   Correct Option: D

   NA

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43. Which of the following is a technique for forecasting?
    

1. 1. Exponential smoothing
      

   
   
   

   2. PERT/CPM
      

   
   
   

   3. Gantt chart technique
      

   
   
   

   4. Control charts

   
   
   

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1. View Hint View Answer Discuss in Forum

   NA
   

   Correct Option: A

   NA
   

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44. In a forecasting model, at the end of period 13, the forecasted value for period 14 is 75. Actual value in the periods 14 to 16 are constant at 100. If the assumed simple exponential smoothing parameter is 0.5, then the MSE at the end of period 16 is
    

1. 1. 820.31
      

   
   
   

   2. 273.44
      

   
   
   

   3. 43.75
      

   
   
   

   4. 14.58

   
   
   

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1. View Hint View Answer Discuss in Forum

   F₁₄ = 75, D₁₄ = 100
   F₁₅ = F₁₄ + α(D₁₄ – F₁₄)
   = 75 + 0.5 (100.75)
   F₁₅ = 87.5
   D₁₅ = 100
   F₁₆ = 87.5 + 0.5 (100 – 87.5)
   F₁₆ = 93.75
   

   MSE =	∑ei²
   	n

   
   Where e_i = D_i - F_i
   

   MSE =	(100 - 75)² + (100 - 87.5)² + (100 - 93.75)²	= 273.44
   	3

   
   

   Correct Option: B

   F₁₄ = 75, D₁₄ = 100
   F₁₅ = F₁₄ + α(D₁₄ – F₁₄)
   = 75 + 0.5 (100.75)
   F₁₅ = 87.5
   D₁₅ = 100
   F₁₆ = 87.5 + 0.5 (100 – 87.5)
   F₁₆ = 93.75
   

   MSE =	∑ei²
   	n

   
   Where e_i = D_i - F_i
   

   MSE =	(100 - 75)² + (100 - 87.5)² + (100 - 93.75)²	= 273.44
   	3

   
   

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45. One of the following statements about PRS (Periodic Reordering System) is not true identify.
    

1. 1. PRS requires continuous monitoring of inventory levels
      

   
   
   

   2. PRS is useful in control of perishable items
      

   
   
   

   3. PRS provides basis for adjustments to account for variations in demand
      

   
   
   

   4. In PRS, inventory holding costs are higher than in Fixed Reorder Quantity System

   
   
   

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1. View Hint View Answer Discuss in Forum

   NA

   Correct Option: C

   NA

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