M6 Flashcards
A prediction of future events used for planning purposes is known as
Forecast
the process of making management decisions on how to deploy resources to best respond to the demand forecasts is known as
Planning
What are the 3 basic categories for forecasting methods?
Judgement
Causal
Time-Series Method
What is defined as, providing important clues for making better forecasts.
Forecast Errors
T/F- Forecasting at the supply chain level, a firm needs forecasts to coordinate with its customers and suppliers.
True
T/F- Forecasting at the process level, output forecasts are needed to design the various processes throughout the organization, including identifying and dealing with in-house bottlenecks
True
What are two things managers can do to alleviate the pain of demand swings?
1) Understand the demand pattern the company is facing
2) employ one or more options to alleviate any avoidable swings
What demand pattern can be described as the repeated observations of demand for a service or product in their order of occurrence
Time Series
What are the 5 basic patterns of most demand time series?
Horizontal
Trend
Seasonal
Cyclical
Random
Which time series pattern is described as the fluctuation of data around a constant mean?
Horizontal
Which time series pattern is described as the systematic increase or decrease in the mean of the series over time
Trend
Which time series pattern is described as a repeatable pattern of increases or decreases in demand, depending on the time of day, week, month, or season
Seasonal
Which time series pattern is described as the less predictable gradual increases or decreases in demand over longer periods of time
Cyclical
Which time series pattern is described as the unforecastable variation in demand
Random
Cyclical patterns arise from what two influences?
1) Business cycle- includes factors that cause economy to go from recession to expansion
2) Service or Product Life Cycle- stages of demand through development to decline
both vary widely on national or international events
The process of changing demand patterns using one or more demand options is known as
Demand Management
What are some options available when it comes to managing demand?
Complementary products
promotional pricing
appointments/reservations
Services or products that have similar resource requirements but different demand cycles are known as
Complementary Products
Varying price at the right time for different customer segments to maximize revenues yielded by existing supply capacity is known as
Revenue Management
An accumulation of customer orders that a manufacturer has promised for delivery at some future date is known as
Backlog
A customer order that cannot be filled when promised or demanded but is filled late is known as
Backorder
An order that cannot be satisfied, resulting in a loss of the sale is known as
Stockout
What are the two questions that must be answered when making decisions about forecasting>
What to forecast
What type of forecasting technique to select for different items
The act of clustering several similar services or products so that forecasts and plans can be made for whole families is known as
Aggregation
an individual item or product that has an identifying code and is held in inventory somewhere along the supply chain, such as in a distribution center is known as a
Stock-keeping unit (SKU)
What are the two general types of forecasting techniques?
Judgment Methods
Quantitative Methods
A forecasting method that translates the opinions of managers, expert opinions, consumer surveys, and salesforce estimates into quantitative estimates is known as
Judgement Methods
What type of forecasts are used when choosing the Quantitative Method?
Causal Methods
Time-series analysis
Trend Projection with Regression
A quantitative forecasting method that uses historical data on independent variables, such as promotional campaigns, economic conditions, and competitors’ actions, to predict demand is known as a
Causal Method
A statistical approach that relies heavily on historical demand data to project the future size of demand and recognizes trends and seasonal patterns is known as a
Time-series analysis
A forecasting model that is a hybrid between a time-series technique and the causal method is known as a
Trend projection w/ regression
he difference found by subtracting the forecast from actual demand for a given period is known as
Forecast Error
What are the 5 basic measures of forecast error?
Cumulative Sum of Forecast Errors (CFE)
Mean Squared Error (MSE)
Standard Deviation of Errors
Mean Absolute Deviation (MAD)
Mean Absolute Percent Error (MAPE)
A measurement of the total forecast error that assesses the bias in a forecast is known as
Cumulative sum of forecast errors
A measurement of the dispersion of forecast errors are known as which THREE forecast errors
MSE- mean squared error
standard deviation of errors
MAD_ mean absolute deviation
A measurement that relates the forecast error to the level of demand and is useful for putting forecast performance in the proper perspective is known as
Mean Absolute Percent Error
What are 4 successful examples of judgement methods
Salesforces Estimates
Executive Opinion
Market Research
Delphi Method
The forecasts that are compiled from estimates of future demands made periodically by members of a company’s salesforce as known as
Salesforce Estimates
A forecasting method in which the opinions, experience, and technical knowledge of one or more managers are summarized to arrive at a single forecast is known as
Executive Opinion
A systematic approach to determine external consumer interest in a service or product by creating and testing hypotheses through data-gathering surveys is known as
Market Research
A process of gaining consensus from a group of experts while maintaining their anonymity is known as
Delphi Method
T/F- Linear regressions are one of the best known and most commonly used causal methods
True
A causal method in which one variable (the dependent variable) is related to one or more independent variables by a linear equation is known as
Linear Regression
The variable that one wants to forecast is known as
Dependent Variable
Variables that are assumed to affect the dependent variable and thereby “cause” the results observed in the past are known as
Independent Variables
