ISDS 3115 Exam 1

Economic Forecasts

addressing business cycle- inflation rate, money supply, housing starts, etc

Technological Forecasts

predict rate of technological progress

impacts development of new products

Demand Forecasts

predict sales of existing products and services

Qualitative Methods

used when situation is vague and little data exists

• new products

• new techology

Quantitative Methods

used when situation is ‘stable’ and historical stat exists

• existing products

• current technology

4 Qualitative Methods

Jury of executive opinion

Delphi method

Sales force composite

Market survey

Jury of executive opinion

pools opinions of high-level experts or managers, sometimes augmented by statistical models

Delphi method

panel of experts (decision makers, staff personnel and respondents), queried iteratively

Sales force composite

estimates from individual salespersons are reviewed for reasonableness, then aggregated

Market survey

ask the customer about future purchasing plans

time-series models

naive approach

moving averages

exponential smoothing

trend projection

associative model

linear regression

time-series forecasting

set of evenly spaces numerical data (weekly, monthly)

based only on past values, no other variables important

naive approach

assumes demand is next period is the same as demand in most recent period

good starting point

moving averages

series of arithmetic means

assume that market demand will stay fairly steady over time

provides overall impression of data over time

weighted moving average

used when some trend or pattern might be present

• older data usually less important

weights based on experience and intuition

Exponential smoothing

form of weighted moving average

• weights decline exponentially

• most recent data weighted most

requires smoothing constant (a)

• ranges from 0 - 1

involves little record keeping of past data

trend projections

fitting a trend line to historical data points, to project into the medium to long-range

linear trends can b found using the least-squares technique

cyclical variations

cycles- patterns in the data that occur every several years

• forecasting is difficult

• wide variety of factors

coefficient of correlation (r )

measures the degree of association

• values range from -1 to +1

coefficient of determination (r²)

measures the percent of change in your predicted by the change in x

• value range from 0-1

management of projects

planning

scheduling

controlling

Planning

goal setting, defining the project, tam organization

scheduling

relate people, money, and supplies to specific actives and actives to each other

controlling

monitor resources, costs, quality, and budgets; revise plans and shift resources to meet time and cost demands

project scheduling techniques

gnats chart

critical path method (CPM)

program evaluation and review technique (PERT)

gnatt charts

ensure that all actives are planned for

the activity time estimates are recorded

the overall project time is developed

purpose of project scheduling

shows the relationship

precedence relationships

setting of realistic time

cost estimates

project controlling

close monitoring of resources, costs, quality, budgets

feedback enables revising the project plan and shift resources

questions PERT and CPM can answer

when will the entire project be completed?

what are the critical actives or tasks in the project?

which are noncritical actives?

what is the probability the project will be completed by a specific date?

CPM

assumes we know a fixed time estimate for each activity and there is no variability in activity times

PERT

uses a probability distribution for activity times to allow for variability