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OSCM 306 > Chapter 3: Forecasting > Flashcards

Chapter 3: Forecasting Flashcards

1
Q

A statement about the future value of a variable of interest.

A

Forecast

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2
Q

The first basic step in the forecasting process

A

Determine the Purpose of the Forecast

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3
Q

The second basic step in the forecasting process.

A

Establish a Time Horizon

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4
Q

The third basic step in the forecasting process.

A

Obtain, clean, and analyze appropriate data

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5
Q

The fourth basic step in the forecasting process

A

Select a forecasting technique

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6
Q

The fifth basic step in the forecasting process

A

Make the forecast

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7
Q

The sixth basic step in the forecasting process

A

Monitor the forecast errors

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8
Q

Difference between the actual value and the value that was predicted for a given period.

A

Error

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9
Q

The average absolute forecast error.

A

Mean Absolute Deviation

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10
Q

The average of squared forecast errors.

A

Mean Squared Error

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11
Q

The average absolute percentage error.

A

Mean Absolute Percent Error

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12
Q

Approach to forecasting that consists mainly of subjective inputs.

A

Qualitative

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13
Q

Approach to forecasting that involves either the projection of historical data or the development of associative models that attempt to use causal variables to make a forecast.

A

Quantitative

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14
Q

Type of information which includes human factors, personal opinions, and hunches.

A

Soft Information

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15
Q

Type of data that is objective information.

A

Hard Data

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16
Q

Forecasts that use subjective inputs such as opinions to form consumer surveys, sales staff, managers, executives, and experts.

A

Judgmental Forecasts

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17
Q

Forecasts that project patterns identified in recent time-series observations.

A

Time-Series Forecasts

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18
Q

Forecasting technique that uses explanatory variables to predict future demand.

A

Associative Model

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19
Q

An iterative process in which managers and staff complete a series of questionnaires, each developed from the previous one, to achieve a consensus forecast.

A

Delphi Method

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20
Q

A time-ordered sequence of observations taken at regular intervals.

A

Time Series

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21
Q

A long-term upward or downward movement in data.

A

Trend

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22
Q

Short-term regular variations related to the calendar or time of day.

A

Seasonality

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23
Q

Wavelike variations lasting more than one year.

A

Cycle

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24
Q

Caused by unusual circumstances, not reflective of typical behavior.

A

Random Variations

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25
Q

A forecast for any period that equals the previous period’s actual value.

A

Naive Forecast

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26
Q

Technique that averages a number of recent actual values, updated as new values become available.

A

Moving Average

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27
Q

More recent values in a series are given more weight in computing a forecast.

A

Weighted Average

28
Q

A weighted averaging method based on previous forecast plus a percentage of the forecast error.

A

Exponential Smoothing

29
Q

Using the forecasting method that demonstrates the best recent success.

A

Focus Forecasting

30
Q

Used to develop forecasts when trend is present.

A

Linear Trend Equation

31
Q

Linear Trend Equation

A

Ft = a + bt

32
Q

Variation of exponential smoothing used when a time series exhibits a linear trend.

A

Trend-Adjusted Exponential Smoothing

33
Q

Regularly repeating movements in series values that can be tied to recurring events.

A

Seasonal Variations

34
Q

The seasonal percentage applied in the multiplicative model.

A

Seasonal Relative

35
Q

Variables that can be used to predict values of the variable of interest.

A

Predictor Variables

36
Q

Technique for fitting a line to a set of points.

A

Regression

37
Q

Minimizes the sum of the squared vertical deviations around the line.

A

Least Squares Line

38
Q

A measure of the scatter of points around a regression line.

A

Standard Error of Estimate

39
Q

A measure of the strength and direction of relationship between two variables.

A

Correlation

40
Q

A visual tool for monitoring forecast errors.

A

Control Chart

41
Q

The ratio of cumulative forecast error to the corresponding value of MAD, used to monitor a forecast.

A

Tracking Signal

42
Q

Persistent tendency for forecasts to be greater or less than the actual values of a time series.

A

Bias

43
Q

Type of error that occurs when the forecast is too low.

A

Positive Error

44
Q

Type of error that is the difference between the actual and predicted values in a given period.

A

Forecast Error

45
Q

Type of error that occurs when the forecast is too high.

A

Negative Error

46
Q

Alternate name for seasonal relative.

A

Seasonal Index

47
Q

The essence of associative techniques is the development of an equation that summarizes the effects of _____

A

Predictor Variables

48
Q

In time-series data, _____ are regularly repeating upward or downward movements in series values that can be tied to recurring events.

A

Seasonal Variations

49
Q

_____ forecasts pertain to ongoing operations.

A

Short-term

50
Q

_____ forecasts are an important strategic planning tool.

A

Long-term

51
Q

Represents an error of zero on a control chart.

A

The Center Line

52
Q

Linear Trend Equation

A

F=a+bt

53
Q

Exponential Smoothing Forecast

A

Ft = Ft-1 + a(At-1 - Ft-1)

54
Q

Formula for error in period t

A

et = At-Ft

55
Q

A value of 0.25 or less of r^2 indicates a _____ predictor.

A

Poor

56
Q

A value between 0.25 and 0.8 of r^2 indicates a _____ predictor.

A

Moderate

57
Q

Formula for trend-adjusted exponential smoothing forecast.

A

TAFt+1 = St + Tt

58
Q

Represents the absolute forecast error.

A

MAD

59
Q

Measures the percentage of variation in the values of the dependent variable that is “explained” by the independent variable.

A

R^2

60
Q

Model in which predictions are made on demand for an established product.

A

Diffusion Model

61
Q

Often used to develop long-range plans and new product development.

A

Executive Opinions

62
Q

A tracking signal compares the cumulative forecast error to the MAD in order to detect any _____ over time.

A

Bias

63
Q

In the equations for the coefficients of a line, what is the a term?

A

Intercept

64
Q

In the equations for the coefficient of a line, what is the b term?

A

Slope

65
Q

In the equations for the coefficients of a line, what is the y term?

A

Value of the time series

OSCM 306 (5 decks)

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