Service Operations 14 – Forecasting Demand for Services

These flashcards cover key concepts and terms related to forecasting demand for services, suitable for exam preparation.

What are the three types of forecasting methods?

Subjective, Causal, Time Series.

Which forecasting method assumes data follows identifiable patterns over time?

Time Series forecasting.

What is the Delphi method used for in forecasting?

To gather expert opinions to make predictions.

What does exponential smoothing use to generate forecasts?

A weighted moving average using recent data points.

What does the term 'Bias' refer to in forecasting error?

Consistent mistakes in forecasts.

What is Mean Absolute Deviation (MAD) used to measure?

The average of absolute errors between forecasted and actual values.

What are independent and dependent variables in Causal forecasting models?

Independent variables are the causes, while dependent variables are the effects.

What challenges arise when using AI for forecasting compared to human expertise?

Balancing computer-generated forecasts with human oversight and insights.

How does a high alpha value affect exponential smoothing?

It makes the forecast more responsive to changes in data.

What purpose does seasonal adjustment serve in forecasting?

To account for seasonal effects in data before forecasting.

Why is the N-period moving average still commonly used?

It remains simple for stable demand patterns despite superior alternatives.

What does the term 'Forecast Horizon' refer to?

The length of time into the future for which forecasts are made.

What is a characteristic of qualitative forecasting?

It relies on opinion and intuition rather than statistical data.

Why is it important to consider both recent and older data in exponential smoothing?

To create a more accurate forecast that reflects the most recent trends.