MGSC 395 Final Exam Questions With
Solutions
Demand Forecasting One of the critical inputs into business success
______________ is used as the basis for all planning, up and down the organization
Demand Forecasting
Demand forecasting can lead to changes in Strategy
Demand forecasting can d...
Demand Forecasting One of the critical inputs into business success
______________ is used as the basis for all planning, up and down the organization
Demand Forecasting
Demand forecasting can lead to changes in Strategy
Demand forecasting can drive Tactical decisions
Forecast accuracy •Forecasts are always wrong!
•Measure of error is important - most firms do not measure this!
Long-term forecasts vs. short-term forecasts •Long-term forecasts are less accurate than
short-term forecasts
•Forecast horizon is important and should be selected based on the purpose of the forecast
, MGSC 395 Final Exam Questions With
Solutions
Aggregate forecasts vs. disaggregate forecasts •Aggregate forecasts are more accurate
than disaggregate forecasts
•Defining the correct level of forecasting is important
Forecasting starts with understanding Demand
Time series The repeated observations of demand for a service or product in their order of
occurrence
There are five basic time series patterns 1.Horizontal
2.Trend
3.Seasonal
4.Cyclical
5.Random - most difficult because its not predictable
Horizontal nearly flat over time
Trend - Just as it says (Just as it says) consistently rising or falling
, MGSC 395 Final Exam Questions With
Solutions
Seasonal Varies in a repeatable pattern over seasons
-Data consistently show peaks and valleys
Cyclical Less predictable than seasonal - caused by the business cycle (economy) and
product life cycle
-Data reveal gradual increases and decreases over extended periods
Demand Management the process of changing demand patterns using one or more
demand options
Complementary Products Finding products and services that can be produced with the
existing equipment or resources.
Ex: Water skis and snow skis; Clothing lines
Promotional Pricing Push sales with favorable pricing
Ex: Automobile rebates or discounts; Buy one get one (BOGO); Lower prices to buy in low
demand periods
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