Forcasting

Question 1

Forcast

Answer 1

A prediction of future events used for planning purposes

Question 2

Demand

Answer 2

A prediction of future demand by analyzing past demand patterns to make predictions

Question 3

Time series

Answer 3

The repeated observations of demand for a service or product in their order of occurrence

Question 4

What are the 5 basic time series patterns?

Answer 4

Horizontal, Trend, Seasonal, Cyclical, Random

Question 5

Horizontal

Answer 5

Data cluster about a horizontal line

Question 6

Trend

Answer 6

Data consistently increasing or decreasing

Question 7

Seasonal

Answer 7

Data consistently shows peaks and valleys

Question 8

Cyclical

Answer 8

Data reveals gradual increases or decreases over extended periods

Question 9

Random

Answer 9

No pattern

Question 10

Demand Management

Answer 10

Process of changing demand patterns using one or more demand options

Question 11

Demand Options

Answer 11

Complementary products, promotional pricing, prescheduled appointments, reservations, revenue management, backlogs, backorders & stockouts

Question 12

What are the four demand forecasting methods?

Answer 12

Judgement methods, causal methods, time-series analysis, trend projection using regression

Question 13

Naive forecast

Answer 13

The forecast for the next period equals the demand for the current period (Forecast=Dt)

Question 14

Horizontal patterns - Estimating the average

Answer 14

Simple moving average

Question 15

Moving Average

Answer 15

sum of last n demands/n

Question 16

Linear regression

Answer 16

Y=mx+b (x=independent variable, y=dependent variable)

Question 17

Sample correlation coefficient

Answer 17

r - Measures strength and direction of relationship between IV & DV (-1<=r<=1)

Question 18

Sample coefficient of determination

Answer 18

r^2 - Measures amount of variation in the DV about its mean that is explained by regression line (0<=r<=1)

Question 19

Inventory management

Answer 19

The planning and controlling of inventories to meet the
competitive priorities of the organization.

Question 20

3 metrics of inventory mgmt

Answer 20

Customer service, Inventory costs, Operational performance

Question 21

3 types of inventory

Answer 21

Raw material, WIP, Finished goods

Question 22

Cycle inventory

Answer 22

The portion of total inventory that varies directly with order size

Question 23

Safety stock

Answer 23

Surplus inventory that protects against uncertainties in demand, lead time, and supply changes.

Question 24

3 Inventory costs

Answer 24

Holding/carrying cost, ordering cost, setup cost

Question 25

Holding/carrying cost

Answer 25

The cost of holding or “carrying” an item in inventory over time including costs to finance the inventory, maintain storage facilities, rent, utilities, taxes, and insurance.

Question 26

Ordering cost

Answer 26

The fixed costs of systems and labor required to place, receive, and audit a replenishment order. Transportation costs might be included if it’s fixed per order.

Question 27

Setup cost

Answer 27

Cost to prepare a machine or process for manufacturing an order. This includes time and labor to clean and change tools.