Forecasting

Question 1

What is Forecasting?

Answer 1

Predicting future demand based on past and present data.

Question 2

What are Seasonalities?

Answer 2

Regular fluctuations in demand based on time (e.g., holidays, weather).

Question 3

What are Cyclical Elements?

Answer 3

Long-term patterns in demand influenced by external factors

Question 4

What is Random Variation?

Answer 4

Demand changes caused by unpredictable events.

Question 5

What is Autocorrelation?

Answer 5

The relationship of current data points with past values.

Question 6

What is Qualitative Forecasting?

Answer 6

Uses expert judgment rather than numerical data

Question 7

What is Time Series Analysis?

Answer 7

Uses past data to predict future trends

Question 8

What is Causal Relationship Forecasting?

Answer 8

Uses independent variables to predict demand

Question 9

What is Simulation Forecasting?

Answer 9

Uses models to simulate real-world conditions

Question 10

Which departments use forecasting to make decision?

Answer 10

All of them

Question 11

What are the main characteristics of Strategic Forecasts?

Answer 11

• Made by top management
• Long-term decision
• High investment

Question 12

What are the main characteristics of Tactical Forecasts?

Answer 12

• Short term
• Cheaper

Question 13

What is the Decoupling point?

Answer 13

Point at which inventory is stored, which allow Supply Chain to operate independently

Question 14

What are Decoupling points used for?

Answer 14

to control bottlenecks

Question 15

Are choosing where to place Decoupling point a Tactic or Strategic decision?

Answer 15

Strategic

Question 16

Forecasting helps determine the level of _________ needed at the __________ ______ to improve _____ _____ and ___________

Answer 16

Inventory, decoupling points, lead times, bottlenecks

Question 17

What is Average Demand?

Answer 17

The typical level of demand over a period

Question 18

What is the Trend?

Answer 18

The general direction in which demand is moving.

Question 19

What are Seasonal Elements?

Answer 19

Demand fluctuations based on predictable seasonal patterns

Question 20

What is Random Variation?

Answer 20

Unexpected fluctuations in demand

Question 21

What is Simple Moving Average?

Answer 21

Averages past demand over a set period.

Question 22

What is Weighted Moving Average?

Answer 22

Assigns different weights to past data points

Question 23

What is Exponential Smoothing?

Answer 23

Gives more weight to recent data while including all past data

Question 24

What is Linear Regression Analysis?

Answer 24

Identifies relationships between demand and other variables.

Question 25

What is short- , medium- , and long-term forecasting?

Answer 25

Covers periods of up to three months. Covers periods from three months to one year Covers periods of one year

Question 26

What is Time Horizon?

Answer 26

the length of time to be forecasted

Question 27

What is Data Availability?

Answer 27

The ease of collecting and using relevant data

Question 28

What are Accuracy Requirements?

Answer 28

The level of precision needed

Question 29

What is Budget?

Answer 29

The resources available for forecasting

Question 30

What is Expertise?

Answer 30

The availability of skilled personnel

Question 31

What are Forecast Errors?

Answer 31

The difference between predicted and actual demand

Question 32

What are Bias Errors?

Answer 32

Consistent forecasting mistakes in one direction

Question 33

What is the Delphi Method?

Answer 33

A structured process for expert forecasting.

Question 34

What is a tactical forecast?

Answer 34

a short-term forecast used to guide day-to-day decisions like inventory restocking and employee scheduling

Question 35

What are strategic forecasts?

Answer 35

a medium to long term forecast used to plan the overall direction and capacity of the business

Question 36

What does the smoothing constant alpha control?

Answer 36

it controls how responsive the forecast is to changed in actual demand higher alpha = more responsive

Question 37

what is the main limitation of exponential smoothing?

Answer 37

it lags behind actual demanding during sudden changes, like rapid growth or decline