Chapter 9 Flashcards
A product of airlines include what?
Safety
On time reliability
Cabin service
Ground service
What is forecasting?
The attempt to quantify demand in a future time period
Forecasting is the foundation of what?
Organization planning
What is planning?
The concern with setting objectives and goals with developing alternate courses of action to reach them
Types of forecasting
Short term- 1 day to 1 month
Medium term- 1 to 5 years
Long term- 5 to 10 years
Forecasting methods
Causal
Time series or trend analysis
Judgmental
What is causal forecasting?
Based on statistical relationship between the forecasted (independent) variable and 1 or more explanatory (dependent) variables
Independent variables used in causal forecasting
Gross national product
Disposable personal income
Consumer spending
Dependent variables used in causal forecasting
RPM
Passenger revenues
Limitations of causal forecasts
- Difficult to quantify number of variables
- Personal discretion involved in independent forecasting has resulted in inadequate dependent variables
- It is often assumed that a functional relationship that existed in the past will exist during the forecasted period
Time series method
Shows the dependent variable as a function of time
Value of time series model is determined by what 4 factors?
Seasonal phenomenon
Long term trend
Irregular events
Cyclical variations
What is a trend?
A reflection of its statistical relationship with time exclusive of cyclical seasonal and irregular disturbances
What is cyclical variation?
Variation of the forecast variable due to the business cycle
Irregular variations can include what?
Wars, riots, and labor strikes
