Forecasting Flashcards
What is Forecasting?
Predicting future demand based on past and present data.
What are Seasonalities?
Regular fluctuations in demand based on time (e.g., holidays, weather).
What are Cyclical Elements?
Long-term patterns in demand influenced by external factors
What is Random Variation?
Demand changes caused by unpredictable events.
What is Autocorrelation?
The relationship of current data points with past values.
What is Qualitative Forecasting?
Uses expert judgment rather than numerical data
What is Time Series Analysis?
Uses past data to predict future trends
What is Causal Relationship Forecasting?
Uses independent variables to predict demand
What is Simulation Forecasting?
Uses models to simulate real-world conditions
Which departments use forecasting to make decision?
All of them
What are the main characteristics of Strategic Forecasts?
- Made by top management
- Long-term decision
- High investment
What are the main characteristics of Tactical Forecasts?
- Short term
- Cheaper
What is the Decoupling point?
Point at which inventory is stored, which allow Supply Chain to operate independently
What are Decoupling points used for?
to control bottlenecks
Are choosing where to place Decoupling point a Tactic or Strategic decision?
Strategic
Forecasting helps determine the level of _________ needed at the __________ ______ to improve _____ _____ and ___________
Inventory, decoupling points, lead times, bottlenecks
What is Average Demand?
The typical level of demand over a period
What is the Trend?
The general direction in which demand is moving.
What are Seasonal Elements?
Demand fluctuations based on predictable seasonal patterns
What is Random Variation?
Unexpected fluctuations in demand
What is Simple Moving Average?
Averages past demand over a set period.
What is Weighted Moving Average?
Assigns different weights to past data points
What is Exponential Smoothing?
Gives more weight to recent data while including all past data
What is Linear Regression Analysis?
Identifies relationships between demand and other variables.
What is short- , medium- , and long-term forecasting?
Covers periods of up to three months.
Covers periods from three months to one year
Covers periods of one year
What is Time Horizon?
the length of time to be forecasted
What is Data Availability?
The ease of collecting and using relevant data
What are Accuracy Requirements?
The level of precision needed
What is Budget?
The resources available for forecasting
What is Expertise?
The availability of skilled personnel
What are Forecast Errors?
The difference between predicted and actual demand
What are Bias Errors?
Consistent forecasting mistakes in one direction
What is the Delphi Method?
A structured process for expert forecasting.
