CH_03_10th_Edition

CH_03_10th_Edition - Forecasting CHAPTER 3 FORECASTING KEY...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Forecasting CHAPTER 3 FORECASTING KEY IDEAS 1. Role of Forecasting. Successful operations planning requires good forecasts as forecasts are a basic input in the decision process providing information on future demand. Forecasting is imprecise, but the range of errors is predictable. 3. Accuracy Measures. Monitoring the accuracy of forecasts is important. Mean absolute deviation (MAD), mean square error (MSE) and mean absolute percent error (MAPE) are all measures of forecast accuracy, summarizing the degree to which actual values differed from predictions for previous periods, on average. The tracking signal (TS) is a measure of the bias of the differences between the actual values and the predictions. 4. Factors Influencing Accuracy. The accuracy of a forecast system can depend upon the accuracy of the historical time series data being used (the more accurate the past data, the more accurate the forecast), the degree of similarity between past and future data patterns (the greater the similarity, the greater forecast accuracy), the degree of aggregation of the data series being forecast (more aggregation, more accuracy), the time lapse between the historical periods and the
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

CH_03_10th_Edition - Forecasting CHAPTER 3 FORECASTING KEY...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online