Forecasting Demand Flashcards
Learn vocabulary for Chapter 4 (33 cards)
Forecasting
The art and science of predicting future events
Economic forecasts
Planning indicators that are valuable in helping organizations prepare medium-to long-range forecasts
Technological forecasts
Long-term forecasts concerned with the rates of technological progress
Demand forecasts
Projections of a company’s sales for each time period in the planning horizon
Quantitative forecasts
Forecasts that employ mathematical modeling to forecast demand
Qualitative forecasts
Forecasts that incorporate such factors as the decision maker’s intuition, emotions, personal experiences, and value system
Jury of executive opinion
A forecasting technique that uses the opinion of a small group of high-level managers to form a group estimate of demand
Delphi method
A forecasting technique using a group process that allows experts to make forecasts
Sales force composite
A forecasting technique based on salespersons’ estimates of expected sales
Consumer market survey
A forecasting method that solicits input from customers or potential customers regarding future purchasing plans
Time series
A forecasting technique that uses a series of past data points to make a forecast
Naive approach
A forecasting technique which assumes that demand in the next period is equal to demand in the most recent period
Moving averages
A forecasting method that uses an average of the n most recent periods of data to forecast the next period
Naive approach
A forecasting technique which assumes that demand in the next period is equal to demand in the most recent period
Moving averages
A forecasting
Forecasting
The art and science of predicting future events
Exponential smoothing
A weighted-moving-average forecasting technique in which data points are weighted by an exponential function
Smoothing constant
The weighting factor used in an exponential smoothing forecast, a number between 0 and 1
Mean absolute deviation (MAD)
A measure of the overall forecast error for a model
Mean squared error (MSE)
The average of the squared differences between the forecasted and observed values
Mean absolute percent error (MAPE)
The average of the absolute differences between the forecast and actual values, expressed as a percent of actual values
Trend projection
A time-series forecasting method that fits a trend line to a series of historical data points and then projects the line into the future for forecasts
Seasonal variations
Regular upward or downward movements in a time series that tie to recurring events
Cycles
Patterns in the data that occur every several years
