Exam 11: Managing Demand and Forecasting

Luigui, who has been operating a very successful Italian restaurant in downtown Toronto, has had great success using forecasting techniques to predict demand for the main menu items ever since opening day. His forecast for last month was grossly inaccurate and so far this month, his forecast appears to be just as bad as last months. It's already time to prepare the forecast for next month, what should he do about his model?

Table 11.9. Quarter Forecasted Demand (Units) Actual Demand (Units) 1 85 95 2 55 55 3 70 45 4 60 75 -Use the information in Table 11.9. What is the mean absolute deviation of forecast errors for the data?

Discuss judgment methods of forecasting.

A seasonal demand time series has a repeatable of pattern increases or decreases in demand based on the week, month, or seasons of the year.

Which of the following is an example of a judgmental forecasting technique?

Assume that a time series forecast is generated for future demand, and subsequently it is observed that the forecast method did not accurately predict the actual demand. Specifically, the forecast errors were found to be: Mean absolute percent error = 10% Cumulative sum of forecast errors = 0% Which one of the statements concerning this forecast is TRUE?

Which one of the following basic patterns of demand is difficult to predict because it is affected by national or international events or because of a lack of demand history reflecting the stages of demand from product development to decline?

What is focus forecasting?

A(n) _________ is a customer order that cannot be filled immediately but is filled as soon as possible.

The process of developing a forecast based on gaining consensus from a group of experts while maintaining their anonymity is called the Delphi method.

What is the value of r = - 1 mean in regression analysis?

Table 11.8 A manager wants to forecast the monthly demand for a machine the company produces. Month No. Machines Sold 1 50 2 65 3 52 4 56 5 55 6 60 -Use the information in Table 11.8. Calculate the MAD for months 4 through 6 for the weighted moving average forecasts. The weights are 0.50, 0.30, and 0.20, where 0.50 refers to the most recent demand.

The repeated observations of demand for a product or service in their order of occurrence form a pattern known as a time series.

A(n) _________ forecast is a time- series method whereby the forecast for the next period equals the demand for the current period.

How do we interpret an r value that is close to +1?

Table 11.2 The manager of a pizza shop must forecast weekly demand for special pizzas so that he can order pizza shells weekly. Recent demand has been: Week No. Special Pizzas 1 50 2 65 3 53 4 56 5 55 6 60 -Use the information from Table 11.2. Using a four- week moving average, what is the forecast for week 7?

Identify and briefly describe four judgment methods for developing forecasts when no historical data is available to develop the forecasts.

The _________ variable is the variable that one wants to forecast.

Table 11.1. -Use the information in Table 11.1. What would be the forecast for September if the exponential smoothing technique were used? (a = 0.30 and the forecast for March was 55)

A tracking signal greater than zero and a mean absolute deviation greater than zero imply that the forecast has