MNGMT CHEAT SHEET - : penalizes large errors Tracking...

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Trend-adjusted exponential smoothing (3 steps) 1. smoothing level 2. smoothing trend 3. = forecast including trend Linear Regression A common tool of causal modeling is linear regression: Additional related variables may require multiple regression modeling Y=a + bX Correlation coefficient ( r ) measures the direction and strength of the linear relationship between two variables. The closer the r value is to 1.0 the better the regression line fits the data points. Multiple regression develops a relationship between a dependent variable and multiple independent variables. Forecast Error : over-forecasts = negative errors and under-forecasts = positive errors Forecasting Accuracy: Mean Absolute Deviation : Measures total error w.o. regard to sign Cumulative Forecast Error : measures bias Mean Square Error
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Unformatted text preview: : penalizes large errors Tracking Signal: measures if model is working( controls forecast bias) Calculating EOQ 1. Calculate (Q) Q=square root of(2*DEMAND*S{ORDERING COSTS}/H) 2.Reorder point: R= DAILY DEMAND(D/250)*LEAD TIME 3.TOTAL inventory costs: annual ordering cost + annual holding costs: Economic Production Quantity (EPQ) A model that allows for incremental product delivery-inventory arrives in increments and is drawn down as it arrives -= p d 1 Q I MAX + = H 2 I S Q D TC MAX EPQ -= p d 1 H 2DS EPQ Calculatin g EPQ 1. TC: 2. MAX inventory d=avg. demand rate p=daily/weekly production rate Q=EPQ 3. S=Set up Cost...
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MNGMT CHEAT SHEET - : penalizes large errors Tracking...

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