Lesson 3 Flashcards
Forecast
an estimate of the future level of some variable
Forecasting is used to determine;
- long-term capacity needs
- yearly business plans
- shorter-term operations and supply chain activities
Forecast types
Demand, supply, price
Laws of forecasting
- Forecasts are almost always wrong (but they are still useful)
- Forecasts for the near term tend to be more accurate
- Forecasts for groups of products or services tend to be more accurate
- Forecasts are no substitute for calculated valued
Qualitative forecasting methods
Market surveys, panel consensus forecasting, delphi method, life-cycle analogy method, build-up forecasts
time series forecasting methods
a quantitative forecasting model that uses a time series to develop forecasts
demand patterns
randomness: unpredictable movements
trend: long-term movement
seasonality: repeated pattern associated with certain times of the year
last period model
simpelest time series model which uses demand for the current period as a forecast for the next period
moving average
derives a forecast by taking an average of recent demand values
weigthed moving average
allows the actual weights applied to past observations to differ
linear regression
statistical technique that expresses a forecast variable (y) as a linear function of some independent variable (x)
causal forecasting methods
a class of quantitative forecasting models in which the forecast is modeled as a function of something other than time
Collaborative Planning, Forecasting, and Replenishment (CPFR)
a set of business processes, backed up by information technology, in which supply chain partners agree to mutual business objectives and measures, develop joint sales and operational plans, and collaborate to generate and update sales forecasts and replenishment plans.
