Qualitative Time Series Forecasting Methods

______ is a sophisticated weighted moving average method that calculates the average of a time series by giving recent demand values more weight than earlier demand values. The formula for ______ is Ft+1 = Ft + α (Dt - Ft) where t+1 Ft+1 = forecast of the time series for period Dt = actual value of the time series in period t Ft = forecast of the time series for period t α = smoothing constant (0 < α < 1)

____ is a method in quantitative forecasting that calculates the average of a time series by giving recent demand values more weight than earlier demand values.

The formula Ft+1 = Ft + α (Dt - Ft) is used in ____ method for time series forecasting.

In Exponential Smoothing, the smoothing constant α should be such that ____.

____ is the measurement used to evaluate the accuracy of forecasts.

_________ forecasts compiled from estimates of future demand made periodically by members of a company’s sales force

Executive Opinion – opinions, experiences and technical knowledge of one or more managers are summarized to arrive at a single _________

Market research – a systematic approach to determine consumer interest in a product or service by creating and testing hypotheses through _________ surveys

Delphi method – a process of gaining consensus from a group of experts while maintaining their _________

These qualitative or judgment methods are useful when no historical data are available from which to develop _________ models

Causal methods such as linear regression are used when historical data are available and the relationship between the factor to be forecasted and other external or internal factors can be _________

Forecasting is the art and science of predicting future events or future value of a variable of interest. Virtually all management decisions are based on ______.

A forecast is a statement of what may be expected to happen, based upon the present conditions and observations interpreted in the light of previous experiences; and is the basis of deciding what action to take in order to secure a desired ______.

Long range, strategic plans by top management are based on forecasts of the type of products consumers will demand in the future and the size and location of product ______.

Planning decisions regarding scheduling, inventory, production, facility, layout and design, workforce, distribution and purchasing among others are functions of customer ______.

Accurate forecasting determines how much inventory a company must keep at various points along its ______ chain.

Time series is a pattern formed by repeated observations of demand for a product or service in their order of ______.

In linear regression models, the dependent variable is a function of only one ______

The objective of linear regression analysis is to find values of a and b that minimize the sum of the squared deviations of the actual data points from the ______

The theoretical relationship in linear regression models is represented by a straight line equation: y = a + bx where a = y-intercept of the line, and b = ______ of the line

Multiple regression analysis is useful in determining a forecasting equation for the dependent variable as a function of several independent ______

The dependent variable in linear regression models could be something like ______ (e.g., sales)

The simple moving average is useful for forecasting demand that is ______ or does not display pronounced demand behavior

Compute a 3-month and 5-month moving average orders forecast for Serenity Rice Trading Month No.of Cavans of Rice ordered January 120 February 90 March 100 April 103 May 88 June 95 July 78 August 130 September 110 October 105 November - QUANTITATIVE FORECASTING METHODS SOLUTION: (Note that the last column should read “5-Month Moving Average.) QUANTITATIVE FORECASTING METHODS QUANTITATIVE FORECASTING METHODS Time Series Methods Weighted Moving Average – each historical demand in the average can have its own weight; for example, 0.50 for the most recent period, 0.30 for the second most recent period, and 0.20 for the third most recent period Ft+1 = 0.50 Dt + 0.30 Dt-1 + 0.20 Dt-2 Determining the precise weights to use for each period of data usually requires some ______-and-error experimentation

Determining the precise weights to use for each period of data usually requires some trial-and-error experimentation, as well as determining the number of periods to include in the moving ______

Weighted Moving Average – each historical demand in the average can have its own weight; for example, 0.50 for the most recent period, 0.30 for the second most recent period, and 0.20 for the third most recent period Ft+1 = 0.50 Dt + 0.30 Dt-1 + 0.20 ______

Weighted Moving Average – each historical demand in the average can have its own weight; for example, 0.50 for the most recent period, 0.30 for the second most recent period, and 0.20 for the third most recent period Ft+1 = 0.50 Dt + 0.30 Dt-1 + 0.20 Dt-2 Determining the precise weights to use for each period of data usually requires some trial-and-error experimentation, as well as determining the number of periods to include in the moving ______

Determining the precise weights to use for each period of data usually requires some trial-and-error experimentation, as well as determining the number of periods to include in the moving average. Ft+1 = 0.50 Dt + 0.30 Dt-1 + 0.20 Dt-2 Weighted Moving Average – each historical demand in the average can have its own weight; for example, 0.50 for the most recent period, 0.30 for the second most recent period, and 0.20 for the third most recent period Determining the precise weights to use for each period of data usually requires some trial-and-error experimentation, as well as determining the number of periods to include in the moving ______