Operations Management Chapter 3: Demand Forecasting in Airlines

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Why are airlines interested in accurately forecasting the number of meals needed for each flight?

To improve operating efficiency (correct)

To control the expenses related to in-flight meals

To plan and organize the in-flight meal services better

To reduce the cost of providing in-flight meals

What is the primary reason for airlines to invest in forecasting the number of meals needed?

To reduce the overall cost of providing in-flight meals

To accurately estimate the demand for goods and services (correct)

To control the expenses associated with in-flight meals

To plan and organize in-flight meal services effectively

How does accurate forecasting of meals help in reducing costs for airlines?

By improving the planning and organization of meal services

By accurately estimating the demand for goods and services (correct)

By controlling the expenses related to in-flight meals

By reducing the overall cost of providing in-flight meals

What can be achieved through effective planning, organizing, and accurate forecasting for airline meal services?

Cost reduction and improved operating efficiency (C) Signup and view all the answers

How do planning, organizing, and accurate forecasting relate to each other in the context of airline meal services?

They overlap and interrelate, making control easier (D) Signup and view all the answers

How does accurate forecasting contribute to improving operating efficiency in airline meal services?

By improving the accuracy in estimating meal demand (C) Signup and view all the answers

In exponential smoothing, what type of forecasting technique is it?

Moving average forecasting (B) Signup and view all the answers

What does the smoothing constant, α, do in exponential smoothing?

It determines the error correction factor (A) Signup and view all the answers

What is the range in which the value of α is often kept for smoothing the forecast?

0.005 to 0.30 (B) Signup and view all the answers

How is the forecast calculated in simple exponential smoothing?

$Ft = Ft-1 + \alpha(Dt-1 - Ft-1)$ (D) Signup and view all the answers

What type of effect does simple exponential smoothing make no explicit adjustment for?

Trend effect (D) Signup and view all the answers

What determines whether the correction in simple exponential smoothing will be positive or negative?

Demand for last period (B) Signup and view all the answers

What does adjusted exponential smoothing take into account that simple exponential smoothing does not?

Trend effects (D) Signup and view all the answers

In exponential smoothing, what is used to compute the forecast Ft?

$\alpha$ value (A) Signup and view all the answers

What kind of data carries more weight in exponential smoothing?

Recent data carry more weight in the moving average. (D) Signup and view all the answers

What type of forecasting technique is exponential smoothing?

Quantitative forecasting (B) Signup and view all the answers

What is the process of predicting a future event based on historical data?

Forecasting (D) Signup and view all the answers

Why are forecasts almost always wrong?

Unpredictable future events (B) Signup and view all the answers

Which department depends on forecasts to project cash flows and capital requirements?

Finance (B) Signup and view all the answers

What is the underlying basis for all business decisions?

Forecasting (B) Signup and view all the answers

What does accurate forecasting contribute to in the context of airline meal services?

Enhancing operating efficiency (B) Signup and view all the answers

What do departments throughout the organization depend on forecasts for?

Formulating and executing plans (B) Signup and view all the answers

What is the typical time range for a short-range forecast?

3 months to 2 years (A) Signup and view all the answers

Which method of qualitative forecasting involves soliciting input from customers about their future purchasing plans?

Market Research/Survey (B) Signup and view all the answers

What method of qualitative forecasting aims to eliminate the influence of dominant individuals in a group?

Delphi Method (D) Signup and view all the answers

Which type of forecasting method is often used for new product planning and system design?

Executive Judgment (B) Signup and view all the answers

What is the typical time range for a long-range forecast?

> 2 years (A) Signup and view all the answers

Which quantitative forecasting method does not consider any other factors besides the historical data in making forecasts?

Naive Method (B) Signup and view all the answers

What is the primary focus of short-range forecasts?

Worker assignments (D) Signup and view all the answers

Which method of qualitative forecasting involves pooling sales estimates from regional salespersons at district and national levels?

Sales Force Composite (B) Signup and view all the answers

What is the focus of medium-range forecasts?

Sales/production planning (A) Signup and view all the answers

What is the main objective of the Delphi Method in forecasting?

To eliminate the effects of dominant individuals in a group (B) Signup and view all the answers