EXTRA 4-Forecasting

Question 1

why is forecasting important?

Answer 1

it gives idea of future demand, and so it helps you in making decisions.
However, it can be difficult and lead to errors.
It is needed for short, medium and long term to make corporate, business and operational decisions.

Question 2

What are types of demand is it possible to forecast?

Answer 2

-independent demand (finished product itself: car)
-dependent demand (parts that will be composing finished products: wheels)

Question 3

explain the forecasting process

Answer 3

0.Describe the problem
1. Choose model
2. develop model
3. Simulation
4. Analyze errors and improve model
5. Forecast with final trained model

Question 4

How can you minimise errors in forecasting?

Answer 4

-Forecast for periods close to the present.
-make forecasting about general regions instead of particular zones
-choose appropriate forecasting model

Question 5

What type of forecasting approaches/methods are there?

Answer 5

-qualitative: panel approach, delphi method, scenario planning

-quantitative: time series, causal modelling, moving average, exponential smoothing