Krajewski SN Chapter 13 - Chapter 13 Forecasting A....

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Unformatted text preview: Chapter 13 Forecasting A. Forecasting Across the Organization 1. Forecasts are critical inputs to business plans, annual plans, and budgets. 2. Managers throughout the organization make forecasts on many different variables other than future demand, such as: 3. How does forecasting relate with processes and value chains? B. Demand Patterns 1. There are five basic patterns of most demand time series. a. b. c. d. e. C. Designing the Forecasting System 1. Deciding what to forecast 2. Choosing the type of forecasting technique a. Judgment methods b. Quantitative methods 3. Forecasting with computers a. Software packages b. Using the Internet: CPFR D. Judgment Methods Types of judgment methods 1. 2. 3. 4. SN:13-1 SN:13-2 Chapter 13: Forecasting 5. Guidelines for using judgment forecasts a. b. E. Causal Methods: Linear Regression 1. Linear regression a. Definition b. Dependent variable and independent variables c. In models with only one independent variable, the theoretical relationship is a straight line: Y= a + bX where Y = dependent variable X = independent variable a = Y-intercept of the line b = slope of the line 2. Sample correlation coefficient, r 3. Sample coefficient of determination, r 2 4. Standard error of the estimate, s yx 5. Forecasting with linear regression F. Time-Series Methods 1. Naive forecast. Forecast = D t 2. Estimating the average a. Simple moving average Formula: Chapter 13: Forecasting SN:13-3 n D D D D n demands n last of Sum F n t t t t t 1 2 1 1 +--- + + + + + = = where D t = actual demand in period t n = total number of periods in the average F t+1 = forecast for period t +1 Application 13.1a: Estimating with Simple Moving Average We will use the following customer-arrival data in this application....
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Krajewski SN Chapter 13 - Chapter 13 Forecasting A....

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