Chapter 4 Flashcards
as compared to long range forecasts, short range forecasts:
deal with less comrehensive issues supporting management decisions
one use of short range forecasts is to determine
job assignments
forecasts used for new product planning, capital expenditures, facility location or expansion and R&D typically utilize a
long range time horizon
three major types of forecasts
economic, technological, and demand
which most requires long range forecasting for its planning purposes
capital expenditures
the two general approaches to forecasting are
qualitative and quantitative
not type of qualitative forecasting
moving average
statements is true of time series forecasting
based on the assumption that the analysis of past demand helps predict future demands
gradual upward or downward movement of data over time is called
a trend
6 mth moving average is better than 3 mth bc
rather stable
increasing the number of periods in a moving average will accomplish greater smoothing, but at the expense of
sensitivity to real changes in the data
comparing exponential smoothing to weighted smoothing average technique is true
E.S. requires less record keeping of past data
which time series model uses both past forecasts and past demand data to generate a new forecast
exponential smoothing
a forecast based on the previous forecast plus a percentage of the forecast error is a
exponential smoothing forecast
values of alpha would cause exponential smoothing to respond the SLOWEST
0.10
