Suppose you run a shoe store and try to forecast demand for the coming week. Previously, you have been using the average sales over the last three...

Suppose you run a shoe store and try to forecast demand for the coming week. Previously, you have been using the average sales over the last three weeks as a forecast for the coming week. Now, a friend is telling you that you should reduce the horizon from three to two weeks. What will this do to your forecast?

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Recent events will have more influence in the forecast.

It will be less biased.

It will lead to more shoes being sold.

It will be more responsive to changes in demand.

It will be more stable.

None of the above.

A firm is selling a fast moving SKU in four different stores. Which of the following statements is true?

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It is important to capture the error of the forecasts, to create inventory buffers.

Individual store-SKU sales forecasts will be more accurate than an aggregate sales forecast for the SKU.

Weekly sales forecasts will have a lower coefficient of variation than daily sales forecasts.

Historical sales data is unlikely to be of any use for forecasting demand in this case.

Individual store-SKU sales forecasts will have lower coefficients of variation than an aggregate sales forecast for the SKU.

None of the above.

Which of the following statements about the Croston's method is true?

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It is used for forecasting products with no demand history.

It is used for forecasting products with intermittent demand.

It finds a correlation between a single dependent variable and one or more independent variables.

It gives the same weight to all the past observations.

It takes into account the magnitude of individual transactions to create the forecast.

None of the above.

You are the inventory control manager for a well-known brand of supermarkets in Colorado (US). You have found that the optimal order quantity for Colombian coffee is 800 cases. Unfortunately, the supplier has a Minimimum Order Quantity (MOQ) of 1,600 cases for this coffee. Suppose you decide to order the minimum order quantity of 1,600 cases.

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The cycle stock will double.

The pipeline inventory will not be affected.

The pipeline inventory will double.

The Total Relevant Cost will be 75% higher than the TRC*.

The cycle stock will quadruplicate.

None of the above.

XL - B, a Canadian fast-food restaurant specialized in exotic meat hamburgers, has a central regional kitchen in which: (1) the bread is baked, (2) the meat is minced, (3) the other ingredients are sliced, (4) the meat and potato chips are cooked and, finally, (5) the hamburger is assembled. Recently, XL - B has decided to move steps (4) and (5) (the cooking and final assembly) of their hamburgers away from the central regional kitchen to fast food outlets located in different neighbourhoods. What will XL - B achieve with this new strategy?

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Move the push-pull boundary upstream in the supply chain.

Increase product customization.

Engineer to Order system.

Offer a smaller and simpler menu.

Have a shorter order cycle time.

None of the above.