SCM 470 Quiz 3 Graded A+
3 Laws of Forecasting 1. aggregate (group of products) is more accurate than disaggregate (single
product)
2. short term is more accurate than long term
3. forecasts are no substitute for actual demand
What are the three families of forecasting methods? Judgement...
3 Laws of Forecasting ✅1. aggregate (group of products) is more accurate than disaggregate (single
product)
2. short term is more accurate than long term
3. forecasts are no substitute for actual demand
What are the three families of forecasting methods? ✅Judgement, causal, time series
What are some disadvantages of focus groups? ✅expensive, time consuming, biased feedback
What is it called when a group of experts individually work to develop a forecast, then share their
estimates among each other? ✅Delphi Method
sales force estimate, executive opinion, market research and the Delphi method are all part of which
forecast family? ✅judgement
Regression, econometric, leading indicator and life-cycle analysis are all a part of which forecasting
family? ✅causal
Which forecasting family is this: observations are arranged in chronological order ✅time series
Trend pattern, seasonal influences, Naive, simple moving average, weighted moving average and
exponential smoothing are all a part of which forecasting family? ✅time series
Which forecasting family does this describe:
Strengths:
- best when data is scare
- good for long-term forecast
, Weaknesses:
- only as good as knowledge provided
- must bring data together in a logical, unbiased, systematic way
- can unknowingly influence/bias forecast ✅judgement
Which forecasting family does this describe:
Strengths:
- simple to calculate
- can be automated by a computer
- based on historical info, which is fairly easy to obtain
Weaknesses:
- relies exclusively on historical values, not considering other info such as expert knowledge, business
climate, etc.
- does not take other easily obtainable data into account (seasonality or cyclical trend info) ✅Time
series
Which forecasting family does this describe?
Strengths:
- can incorporate data beyond historical sales, such as economic data
- can include pipeline considerations (inventory & lead times in supply chain)
- can incorporate unusual events (strikes, floods)
Weakness:
o most sophisticated forecasting tool
o requires constant monitoring ✅causal
What is the formula for forecast error? ✅Actual - Forecast
What does mean forecast error measure? ✅Bias
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