Review questions

Review questions

Test your understanding with these questions. Marking and saved results are available with a free account.

1. Question 1A matched quarter sold 120 units and the planner uses provisional 10% growth. The current quarter sold 90 with five stockout days. Which conclusion is best before revising the forecast?

   True demand fell to 90, so lower the baseline to 90. 132 is a conditional baseline; inspect unfilled orders before estimating lost demand. Exactly 42 units were lost because 132−90 = 42. Delete the quarter from raw history to protect the average.
2. Question 2The old version sold 500 monthly before a new version launched. After launch, the old version sold 380 and the new version 170 with price and channels unchanged. What is the observed net increase in category sales?

   50 units 120 units 170 units 550 units
3. Question 3In a valid two-period time test, naïve forecast errors were +10 and +10, while a three-period average had +20 and +20 (error = actual minus forecast). Which decision is supported?

   The three-period average is better because its error numbers are larger. Neither method is biased because errors are positive. Naïve has lower MAE in this window, and both underforecast. The test proves naïve is best for every future demand series.
4. Question 4Demand is 1,200, regular capacity 1,000, opening stock 150 and required closing buffer 50. Overtime can produce 100 units at incremental cost 8 each if materials and quality permit. Which decision pack fits reconciliation?

   There is no gap because capacity plus stock is approximately 1,150. The gap is 50, so run 50 overtime units without checking materials. The gap is 100; consume 50 buffer units and conceal the rest of demand. The gap is 100; present overtime costing 800 conditional on materials and quality alongside alternatives.

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