lesson 2

Question 1

in operations management it refers to a prediction of future demand for products or services over a specified future time period.

Answer 1

forecast

Question 2

is a vital activity that influences decision-making related to production, inventory management, capacity planning, and resource
allocation, among other areas.

Answer 2

forecasting

Question 3

Forecasting can be based on?

Answer 3

historical data, qualitative analysis, statistical
methods, or a combination of these

Question 4

What is the main aim of forecasting in operations management?

Answer 4

to align operational activities and resources with anticipated demand to efficiently
meet customer needs while optimizing costs.

Question 5

Used for decisions related to day-to-day operations, such as
scheduling, inventory ordering, and production runs. It typically spans days to a few months.

Answer 5

Short-term forecasts

Question 6

Used for decisions related to resource allocation, capacity planning, and budgeting. It usually spans from a few months to a couple of years.

Answer 6

medium-term forecasts

Question 7

Focuses on strategic decisions like business growth, capital investments, and entering new markets. It covers time frames that are several years
or more.

Answer 7

Long-term Forecasts

Question 8

Relies on expert judgment, intuition, and subjective assessments. It is typically used when historical data is not available, such as
for new product launches.

Answer 8

Qualitative Forecasting

Question 9

Employs mathematical models and historical data to predict future demand. Common methods include moving averages,
exponential smoothing, and regression analysis.

Answer 9

Quantitative Forecasting

Question 10

Regularly updating forecasts is essential. As
new data becomes available or
market conditions change,
adjustments are needed to ensure
the forecast remains relevant.

Answer 10

Frequency of Updates

Question 11

All forecasts will have to account for
the various factors or components
of variation, such as trend,
seasonality, cyclic variations, and
random fluctuations.

Answer 11

Components of Variation

Question 12

Elements of Good Forecast

Answer 12

•Accuracy
•Timeliness
•Reliability
•Simplicity
•Cost Effective
•Clear Assumptions

Question 13

Another Elements of Good Forecast

Answer 13

• ADAPTABILITY
•APPROPRIATE TIME HORIZON
•FEEDBACK MECHANISM
•COLLABORATION
•DOCUMENTEDPROCESS AND METHODOLOGY
•BIAS MINIMIZATION
•CONSISTENCY

Question 14

Steps in Forecasting Process

Answer 14

1. Problem Definition
2. Gathering Information
3. Choosing a Forecasting Method
4. Developing the Forecast
5. Testing the Forecast
6. Implementing the Forecast
7. Monitoring and Control
8. Feedback and Adjust
9. Documentation
10. Continuous Learning