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Flashcards in Chapter 4 Deck (26)
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1
Q

Process of predicting a future event. It is the underlying basis of all business decisions.

A

Forecasting

2
Q

3 forecasting time horizons:

A

Short range, medium range and long range.

3
Q

Up to 1 year, generally less than 3 months. Used for purchasing, job scheduling, job assignments etc.

A

Short range forecast

4
Q

3 months to 3 years, sales and production planning, budgeting.

A

Medium range forecast

5
Q

3+ years, new product planning, facility location, research and development.

A

Long-range forecast

6
Q

___ and ____ require longer forecasts than maturity and decline.

A

introduction and growth

7
Q

addressing business cycle- inflation rate, money supply, housing starts, etc.

A

economic forecasts

8
Q

predict rate of technological progress; impacts development of new products

A

technological forecasts

9
Q

predict sales of existing products and services.

A

demand forecasts

10
Q
seven steps in forecasting:
1. determine the use
2. Select the items to be forecasted
3. Determine the time horizon of the forecast
4. Select the forecasting models
5. gather the data needed
r
A
  1. Make the forecast

7. Validate and implement the results

11
Q

method of forecasting used when situation is vague and little data exist; involves intuition, experience

A

qualitative methods

12
Q

method of forecasting used when situation is ‘stable’ and historical data exist; involves mathematical techniques

A

quantitative methods

13
Q

Qualitative method that pool opinions of high-level experts and managers, combines managerial experience with statistical models. It is relatively quick, but had the group think disadvantage.

A

jury of executive opinion

14
Q

Qualitative method that uses a panel of experts, iterative group process that continues until consensus is reached. Has three types of participants: decision makers, staff and respondents.

A

delphi method

15
Q

Qualitative method, each salesperson projects their sales. Combined at district and national levels, sales reps know customer wants and may be overly optimistic.

A

sales force composite

16
Q

set of evenly spaced numerical data. forecast based only on past values, no other variables important

A

time-series forecasting

17
Q

Four types of time-series components:

A

trend, seasonal, cyclical and random.

18
Q

persistent, overall upward or downward pattern. changes due to population, technology, age, culture, etc. typically several years duration.

A

trend component

19
Q

regular pattern of up and down fluctuations. due to weather, customs, etc. occurs within a single year.

A

seasonal component

20
Q

repeating up and down movements, affected by business cycle, political, and economic factors. multiple years duration.

A

cyclical component

21
Q

erractic, unsystematic, residual fluctuations. due to random variation or unforeseen events.

A

random component

22
Q

assumes demand in next period is the same as demand in most recent period.

A

naive approach

23
Q

patterns in the data that occur every several years.

A

cycles.

24
Q

Forecasts are useful in projecting staffing levels, inventory levels and

A

Factory capacity

25
Q

Qualitative method that asks the customer about purchasing plans. Useful for demand product design and planning, what consumers say and what they do may be different, may be overly optimistic.

A

Market survey

26
Q

Series of artithmetoc means, used if little or no trend. Used often for smoothing.

A

Moving average.