Podcast
Questions and Answers
Which type of demand is forecasted? (Select one)
Which type of demand is forecasted? (Select one)
Which forecasting technique uses mathematical models and historical data to make forecasts? (Select one)
Which forecasting technique uses mathematical models and historical data to make forecasts? (Select one)
Which type of forecast variation involves a pattern of variation within one year that can be repeated from year-to-year?
Which type of forecast variation involves a pattern of variation within one year that can be repeated from year-to-year?
Which of the following is not a Time Series Forecasting Technique? (Select one)
Which of the following is not a Time Series Forecasting Technique? (Select one)
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Cause and effect forecast models use the historical relationship between an independent variable(s) and a dependent variable to predict the future values of the dependent variable.
Cause and effect forecast models use the historical relationship between an independent variable(s) and a dependent variable to predict the future values of the dependent variable.
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Which one of the following is NOT one of the Fundamentals of Forecasting? (Select one)
Which one of the following is NOT one of the Fundamentals of Forecasting? (Select one)
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Are the following two absolute deviations correct? 1) 500 Actual - 300 Forecast = 200 Absolute 2) 500 Actual - 700 Forecast = -200 Absolute
Are the following two absolute deviations correct? 1) 500 Actual - 300 Forecast = 200 Absolute 2) 500 Actual - 700 Forecast = -200 Absolute
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The Bullwhip Effect occurs because suppliers and manufacturers do not make enough inventory to satisfy demand.
The Bullwhip Effect occurs because suppliers and manufacturers do not make enough inventory to satisfy demand.
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Which of the following forecasting methodologies is considered a cause and effect forecasting technique? (Select one)
Which of the following forecasting methodologies is considered a cause and effect forecasting technique? (Select one)
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_____ measures the size of the forecast error in units.
_____ measures the size of the forecast error in units.
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Are the following two absolute deviations correct? 1) 500 Actual - 400 Forecast = 100 Absolute 2) 500 Actual - 600 Forecast = -100 Absolute
Are the following two absolute deviations correct? 1) 500 Actual - 400 Forecast = 100 Absolute 2) 500 Actual - 600 Forecast = -100 Absolute
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Historical analogy is a quantitative method of forecasting.
Historical analogy is a quantitative method of forecasting.
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Collaborative Planning, Forecasting, and Replenishment (CPFR) creates the bullwhip effect through the sharing of plans, forecasts, and delivery schedules.
Collaborative Planning, Forecasting, and Replenishment (CPFR) creates the bullwhip effect through the sharing of plans, forecasts, and delivery schedules.
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Which one of the following is a type of qualitative forecasting? (Select one)
Which one of the following is a type of qualitative forecasting? (Select one)
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For every forecasting problem, there is one best forecasting technique.
For every forecasting problem, there is one best forecasting technique.
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In the absence of any other information or visibility, individual supply chain participants can begin second-guessing what is happening with ordering patterns, and potentially start over-reacting. This is known as?
In the absence of any other information or visibility, individual supply chain participants can begin second-guessing what is happening with ordering patterns, and potentially start over-reacting. This is known as?
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When creating a quantitative forecast, if you detect a repeating pattern of demand data from year to year with some periods of considerably higher demand than others, this is known as what type of variation?
When creating a quantitative forecast, if you detect a repeating pattern of demand data from year to year with some periods of considerably higher demand than others, this is known as what type of variation?
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Independent demand items are not forecasted because the demand quantity can be directly calculated based on the demand for the finished end product.
Independent demand items are not forecasted because the demand quantity can be directly calculated based on the demand for the finished end product.
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The most commonly used forecasting accuracy measures are Mean Absolute Deviation (MAD), Mean Multiple Regression (MMR), and Mean Absolute Percentage Error (MAPE).
The most commonly used forecasting accuracy measures are Mean Absolute Deviation (MAD), Mean Multiple Regression (MMR), and Mean Absolute Percentage Error (MAPE).
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The business practice that combines the intelligence of multiple trading partners in the planning and fulfillment of customer demands is known as:
The business practice that combines the intelligence of multiple trading partners in the planning and fulfillment of customer demands is known as:
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The process of combining statistical forecasting techniques and judgment to construct demand estimates for products or services is known as?
The process of combining statistical forecasting techniques and judgment to construct demand estimates for products or services is known as?
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Independent Demand is demand for an item that is unrelated to the demand for other items, such as a finished product, a spare part, or a service part.
Independent Demand is demand for an item that is unrelated to the demand for other items, such as a finished product, a spare part, or a service part.
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Dependent demand items are generally forecasted based on market conditions and/or historical sales and usage data.
Dependent demand items are generally forecasted based on market conditions and/or historical sales and usage data.
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The process of combining statistical forecasting techniques and judgment to construct demand estimates for products or services is Collaborative Planning, Forecasting, and Replenishment.
The process of combining statistical forecasting techniques and judgment to construct demand estimates for products or services is Collaborative Planning, Forecasting, and Replenishment.
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The following are ALL common quantitative forecasting models EXCEPT:
The following are ALL common quantitative forecasting models EXCEPT:
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Mean Absolute Deviation (MAD) is a measure of forecast bias. MAD indicates the tendency of a forecast to be consistently higher or lower than actual demand.
Mean Absolute Deviation (MAD) is a measure of forecast bias. MAD indicates the tendency of a forecast to be consistently higher or lower than actual demand.
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Which one of the following statements about forecasting is FALSE?
Which one of the following statements about forecasting is FALSE?
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All Cause-and-Effect Models focus on the impact of one independent variable.
All Cause-and-Effect Models focus on the impact of one independent variable.
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When creating a quantitative forecast, if you detect a pattern of demand data that shows a movement of a variable over time, this is known as what type of variation?
When creating a quantitative forecast, if you detect a pattern of demand data that shows a movement of a variable over time, this is known as what type of variation?
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Which of the following is NOT one of the basic types of forecasting? (Select one)
Which of the following is NOT one of the basic types of forecasting? (Select one)
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The Qualitative forecasting method is based on opinion & intuition.
The Qualitative forecasting method is based on opinion & intuition.
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Which of the following forecasting methodologies is considered a Time Series forecasting technique? (Select one)
Which of the following forecasting methodologies is considered a Time Series forecasting technique? (Select one)
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Which one of the following is NOT a type of qualitative forecasting? (Select one)
Which one of the following is NOT a type of qualitative forecasting? (Select one)
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Qualitative forecasting techniques generally take advantage of the knowledge of experts and therefore do not require much judgment.
Qualitative forecasting techniques generally take advantage of the knowledge of experts and therefore do not require much judgment.
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Which of the following is NOT a type of qualitative forecasting? (Select one)
Which of the following is NOT a type of qualitative forecasting? (Select one)
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Study Notes
Forecasting Types and Techniques
- Independent Demand: Unrelated demand for items like finished products or service parts.
- Quantitative Forecasting: Utilizes mathematical models and historical data for making predictions.
- Seasonal Variation: Repeating demand patterns within a year, often characterized by peaks in specific periods.
- Time Series Techniques: Simplified methods like Simple Moving Average, Naive Forecast, and Weighted Moving Average; excludes historical analogy.
- Collaborative Planning, Forecasting, and Replenishment (CPFR): Enhances supply chain efficiency by sharing forecasts and replenishment plans.
Forecasting Validations and Errors
- Absolute Deviations: Errors in absolute terms show discrepancies between actual and forecasted values. Check calculations to ensure accuracy.
- Bullwhip Effect: Mismanagement in supply chain leading to overreaction and inventory inconsistencies; not caused by lack of inventory.
- Mean Absolute Deviation (MAD): Measures forecast accuracy via average unsigned errors over time; distinct from forecast bias.
Qualitative vs Quantitative Forecasting
- Qualitative Forecasting: Based on intuition and expert opinions, not always relying on statistical methods.
- Cause and Effect Models: Use historical relationships between variables to predict future outcomes.
- Delphi Method: Not a quantitative model; it relies on expert consensus over time.
Forecasting Fundamentals and Misconceptions
- Granularity Misconception: Greater details in forecasts do not guarantee heightened accuracy.
- Complex Methodology Assumption: Simpler forecasting methods can yield equally valid or better predictions than complex ones.
- Multiple Variables: Cause-and-effect forecasting may involve more than one independent variable to enhance predictions.
Key Terms and Definitions
- Demand Planning: Merges statistical methods with professional judgment to create demand estimates.
- Naive Method: A simplistic forecasting approach that is qualitative, not quantitative.
- Mean Absolute Percentage Error (MAPE): Another measure of forecasting accuracy that focuses on percentage errors, not mentioned in the given statements.
Common Misconceptions in Forecasting Practices
- Independent demand requires forecasts, and dependent demand relies on the demand for finished products for projections.
- Historical Analogy is not a quantitative method; it belongs to qualitative approaches.
- Most forecasts are biased by nature; thus, regular data usage is vital for trustworthiness in forecasting.
These notes highlight significant concepts, terminology, and common misconceptions surrounding forecasting methods and practices within supply chain management.
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Description
Test your knowledge on different types of demand and forecasting techniques with this quiz. Identify the correct definitions and classifications related to independent and quantitative demand. Perfect for students studying economics or business management.
