Topic 10 Flashcards
(16 cards)
Occurs when demand for an item cannot be filled from existing inventory
Stockouts
The process of using analytics, data, insights, and experience to make predictions + respond to various business needs
Business Forecasting
A measure of how far off your forecasts are compared to what actually happened
Forecast error
The process you use to estimate future demand
Forecasting
Decide what to forecast-> Evaluate your data-> Select the Forecasting Method -> Create the Forecast -> Assess Forecast Accuracy
Forecasting Model
Data that reveals a regularly repeating trend
Seasonality
Economic events like recessions or inflation can create fluctuations that affect your business-and the forecasting tool you should use
Economic Cycle
The span of time for which you are forecasting; shorter-term forecasts are usually more accurate
Forecast Horizon
Lost revenues, goodwill and reputation, and follow-on business
Costs Associated with Stockouts
Opportunity Costs, Holding Costs, Markdown and Disposal Costs
Costs Associated with Overstock
When the customer decides what product to buy
When the customer actually uses the product
Two moments of Truth
Internal tools for Integrated Business Planning
Sales & operations planning (S&OP)
External tools for Integrated Business Planning
Collaborative planning, forecasting, and replenishment (CPFR)
-Time series Models
-Correlational Models
Quantitative Forecasting Methods
Grass Roots, Market Research, Expert Panels, Executive Judgment, Historical Analogy, Delphi
Qualitative Forecasting Methods
1.What does a well designed product forecast look like?
2.How can you effectively coordinate forecasting across decision makers within the firm and with supply chain partners?
3. How can you improve the quality of your forecasts?
3 Core Questions
