Forecasting Demand

Question 1

Forecasting

Answer 1

The art and science of predicting future events

Question 2

Economic forecasts

Answer 2

Planning indicators that are valuable in helping organizations prepare medium-to long-range forecasts

Question 3

Technological forecasts

Answer 3

Long-term forecasts concerned with the rates of technological progress

Question 4

Demand forecasts

Answer 4

Projections of a company’s sales for each time period in the planning horizon

Question 5

Quantitative forecasts

Answer 5

Forecasts that employ mathematical modeling to forecast demand

Question 6

Qualitative forecasts

Answer 6

Forecasts that incorporate such factors as the decision maker’s intuition, emotions, personal experiences, and value system

Question 7

Jury of executive opinion

Answer 7

A forecasting technique that uses the opinion of a small group of high-level managers to form a group estimate of demand

Question 8

Delphi method

Answer 8

A forecasting technique using a group process that allows experts to make forecasts

Question 9

Sales force composite

Answer 9

A forecasting technique based on salespersons’ estimates of expected sales

Question 10

Consumer market survey

Answer 10

A forecasting method that solicits input from customers or potential customers regarding future purchasing plans

Question 11

Time series

Answer 11

A forecasting technique that uses a series of past data points to make a forecast

Question 12

Naive approach

Answer 12

A forecasting technique which assumes that demand in the next period is equal to demand in the most recent period

Question 13

Moving averages

Answer 13

A forecasting method that uses an average of the n most recent periods of data to forecast the next period

Question 14

Naive approach

Answer 14

A forecasting technique which assumes that demand in the next period is equal to demand in the most recent period

Question 15

Moving averages

Answer 15

A forecasting

Question 16

Forecasting

Answer 16

The art and science of predicting future events

Question 17

Exponential smoothing

Answer 17

A weighted-moving-average forecasting technique in which data points are weighted by an exponential function

Question 18

Smoothing constant

Answer 18

The weighting factor used in an exponential smoothing forecast, a number between 0 and 1

Question 19

Mean absolute deviation (MAD)

Answer 19

A measure of the overall forecast error for a model

Question 20

Mean squared error (MSE)

Answer 20

The average of the squared differences between the forecasted and observed values

Question 21

Mean absolute percent error (MAPE)

Answer 21

The average of the absolute differences between the forecast and actual values, expressed as a percent of actual values

Question 22

Trend projection

Answer 22

A time-series forecasting method that fits a trend line to a series of historical data points and then projects the line into the future for forecasts

Question 23

Seasonal variations

Answer 23

Regular upward or downward movements in a time series that tie to recurring events

Question 24

Cycles

Answer 24

Patterns in the data that occur every several years

Question 25

Linear-regression analysis

Answer 25

A straight-line mathematical model to describe the functional relationship between independent an dependent variables

Question 26

Standard error of the estimate

Answer 26

A measure of variability around the regression line– its standard deviation

Question 27

Coefficient of correlation

Answer 27

A measure of the strength of the relationship between two variables

Question 28

Coefficient of determination

Answer 28

A measure of the amount of variation in the dependent variable about its mean that is explained by the regression equation

Question 29

Multiple regression

Answer 29

An associative forecasting method with more than one independent variable

Question 30

Tracking signal

Answer 30

A measurement of how well a forecast is predicting actual values

Question 31

Bias

Answer 31

A forecast that is consistently higher or consistently lower than actual values of a time series

Question 32

Adaptive smoothing

Answer 32

An approach to exponential smoothing forecasting in which the smoothing constant is automatically changed to keep errors to a minimum

Question 33

Focus forecasting

Answer 33

Forecasting that tries a variety of computer models and selects the best one for a particular application