Module 3

Question 1

A projection of future sales, revenues, earning, costs and other possible variables that are helpful in the firm’s operations

Answer 1

Forecasting

Question 2

Primary objective is to reduce risk or uncertainty that the firm will face in making decisions

Answer 2

Forecasting

Question 3

Starting point of business planning

Answer 3

forecasting

Question 4

who uses forecasting as a tool for decision making?

Answer 4

Top management
Production manager
Purchasing manager
Marketing manager
Finance manager
Human resource maganer

Question 5

Makes use of forecasting as a tool for long-range planning, particularly in providing a basis for performanc targets, etc

Answer 5

top management

Question 6

utilizes forecasts to determine the amount of raw material what will be needed in production

Answer 6

production manager

Question 7

Uses the forecast to ascertain the volum or bulk of material that should be purchase

Answer 7

Purchasing manager

Question 8

Use forecast to estimate how much sales should be maid in a particular period

Answer 8

Marketing manager

Question 9

use forecast to anticipate the funding needed by the firm

Answer 9

Finance manager

Question 10

Use forecast to supply the human resource needed in achiveing the firm objective

Answer 10

Human resource manager

Question 11

Two approaches to forcasting

Answer 11

quantitative
Qualitative

Question 12

incorporate factors such as the decision maker’s intuition, emotion, personal experience, and value system; useful in formulating short term forecast

Answer 12

Qualitative (or judgement) forecast

Question 13

Qualitative forecasting methods

Answer 13

Expert opinions
Delphi method
Sales force polling
Consumer market surveys
PERT-derived forecasts (program evaluation and review techniques)

Question 14

The views of the manager or a group with high level of expertise

Answer 14

Expert opinions

Question 15

similar to expert opinion. But that members of a group of experts are asked individually through a questionnaire

Answer 15

Delphi method

Question 16

every sales person estimates the sales in her region; the responsibility of drawing up the forecast lies with the people

Answer 16

sales force polling

Question 17

Firm, at times, conduct their owm or potential customer surveys to accumulate information regarding future purchasing plans

Answer 17

Consumer market surveys

Question 18

A methodolody requires that the expert provide 3 estimates: pessimistic (a), the most likely (m), and optimistic (b)

Answer 18

PERT -derived forcasts
Program Evaluatuon and Review Technique

Question 19

Lokking ahead to see what actions should be to realize particular goals

Answer 19

Planning

Question 20

looking backward, determining what actually happened and comparing it with the previously planned outcomes

Answer 20

control

Question 21

Financial plans for the future and are a key component od planning. They identify objectives and the actions needed to achieve them

Answer 21

budgets

Question 22

Plots a direction for an organization’s future activities and operations. It generally covers at least five years

Answer 22

Strategic plan

Question 23

Previous year’s budget is irrelevant in allocating resources for the current year

Answer 23

Zero base approach

Question 24

starts with previous years budget

Answer 24

Incrementak based approach

Question 25

The comprehensive financial plan for the organization as a whole Typically for one year period Yearly budgets are broken down into quarterly and monthly budget

Answer 25

The master budget

Question 26

A movingb12 month budget As a month expires in the budget, an additional month in the future is added sonthe company always has a 12 month plam on hand

Answer 26

continuous budget

Question 27

Review the budget Provides policy guidelines and budgetary goals

Answer 27

budget committee

Question 28

Usually the controller, is the pedson responsible for directing and coordinating the organization's overall budgeting process

Answer 28

Budget director

Question 29

The maater budget major components

Answer 29

operating budgets Financial budgets

Question 30

Describe the income generating activities

Answer 30

operating budget

Question 31

Details the inflows and outflows of cash and the overall financial position

Answer 31

financial budget

Question 32

Approved by the budget committee and describes expexted sales in units and pesos The basis for all of the other operating budgets and most of the financial budget

Answer 32

sales budget

Question 33

tells how many units must be produced to meet sales needs and to sarisfy endinf inventory requirements

Answer 33

production budget

Question 34

tells the amount and cost of raw materials to be purchased

Answer 34

Direct materials purchases budget

Question 35

Shows the total direct labor hours and the direct labor cost needed for the number of units in the production budget

Answer 35

Direct labour budget

Question 36

use a variety of mathematical models that rely on hiatorical data and/or causal variables to forecast demand

Answer 36

quantitative forecast

Question 37

Assumes that the future is a funtion of the past. Thus, historical data are used to predict the future using sequences with equal period

Answer 37

time series forecasting

Question 38

the gradual upward or downwaed movement of the data over time

Answer 38

trend

Question 39

data pattern that repeats itself after a period of days

Answer 39

Seasonality

Question 40

a pattern of data that occurs every several years

Answer 40

Cycle

Question 41

blips in the data by chance and unusual situations

Answer 41

Random variations

Question 42

Such as linear regession, incorporate the variables or factors that might influence the quantity beinh forecast

Answer 42

Associative or casual models