Exam 11: Forecasting and Demand Planning

Community General Hospital finds itself treating many bicycle accident victims. Data from the last seven 24-hour periods is shown below: Day Bicycle Victims 1 6 2 8 3 4 4 7 5 9 6 9 7 7 a. What is the forecast for day 4 using a moving average model with AP = 3? b. With an alpha value of .5 and a starting forecast in day 4 equal to the actual data, what is the exponentially smoothed forecast for day 8? c. What is the MAD for days 6 to 8 for an exponentially smoothed forecasting model with an alpha value of .5 and a starting forecast in day 4 equal to the actual data? d. What is the tracking signal for days 6 to 8 for an exponentially smoothed forecasting model with an alpha value of .5 and a starting forecast in day 4 equal to the actual data?

Explain how forecasting is used at different levels of an organization.

Explain the difference between statistical forecasting and judgment forecasting.

____ forecasts are needed for planning production schedules and to assign workers to jobs.

Regression models are often used in forecasting to incorporate causal variables that may influence a time series.

The following data represents the home mortgage loan interest rates at a local bank over an eight-month period: Month Rate \%) Month Rate \%) 1 8.7 5 8.6 2 8.7 6 8.4 3 8.6 7 8.8 4 8.6 8 8.8 a. What is the forecast for month 8 using a moving average model with an AP = 4? b. What is the forecast for month 9 using a moving average model with an AP = 6?

All of the following are important in choosing a forecasting method except

In forecasting, irregular variation that is explainable can normally be discarded.

As the value of k is increased in a moving average forecasting model, the forecast reacts more slowly to recent changes in the time series.

A long-range forecast typically covers a planning horizon of 3 to 12 months.

Top managers use detailed forecasts of unit sales for individual products e.g., brands and sizes) for decisions involving financial planning and for sizing and locating new facilities.

Explain judgmental forecasting, including grass roots forecasting and the Delphi Method.

Explain the difference between a moving average and single exponential smoothing forecasting model.

Discuss the three planning horizons used in forecasting and the types of decisions made in each.

If actual demand for a product is highly influenced by only random variation, the quantitative technique to use for forecasting demand is

Long range forecasts expressed in sales dollars are more meaningful to top managers than to managers at the operations level.

Another name for planning horizon is time bucket.

Single exponential smoothing is a forecasting technique that uses a weighted average of past time-series values to forecast the value of the time series in the next period.

A moving average model works best when ____ in the time series.

Because of random variations, forecasts are never 100% accurate.