Question

1. Which one of the following is a leading indicator for the general business cycle?

residential building contracts

retail sales

unemployment figures

2. Which one of the following is a coincident indicator for the general business cycle?

residential building contracts

retail sales

unemployment figures

bank rates on business loans

3.

Which factor affecting demand for goods and services is an external factor?

salesperson quotas or incentives

expansion or contraction of geographical market target areas

government actions

product mix

4.

Which one of the following factors affecting demand for goods and services is an internal factor?

backlog policy

general state of the economy

competitor actions

consumer tastes

5.

Which one of the following statements about forecasting is FALSE?

To achieve the objective of developing a useful forecast from the information at hand, the forecaster must select the appropriate technique. This choice sometimes involves a trade-off between forecast accuracy and cost.

Three general types of forecasting techniques are used for demand forecasting: time series analysis, causal methods, and judgment methods.

Time series express the relationship between the factor to be forecast and related factors, such as promotional campaigns, economic conditions, and competitor actions.

A time series is a list of repeated observations of a phenomenon, such as demand, arranged in the order in which they actually occurred.

Answer 1

1. Answer: Residential Building Contracts

Rationale: Leading indicators include new orders for capital goods by manufacturers, average weekly hours worked in manufacturing, factory orders, stock prices, building permits etc

2. Answer: Unemployment figures

Rationale: Coincident Factors include personal income level, unemployment rate and industrial production.

3. Answer: Government Actions

Rationale: Government actions are not under the control of an organization and therefore, these are considered to be external factors

4. Answer: Backlog policy

Rationale: The taste of customers or actions by competition or the economy are all external factors that the are out of control of an organization. A backlog policy is the policy that is decided by the company amd therfore, it is an internal factor.

5. Answer: Time series express the relationship between the factor to be forecast and related factors, such as promotional campaigns, economic conditions, and competitor actions.

Rationale: Time series is based on the repeated observations over a period of time and is not dependable upon promotional campaigns, competitve actions by rivals or economic conditions.