MGMT 333 Exam 3

This is long-term upward or downward movement in data, such as population shifts.

Trend

You would choose this type of qualitative forecast because of their direct contact with customers. They may be aware of plans customers may be considering for the future

Salesforce Opinions

Forecast accuracy __________ as the forecasting horizon increases.

Decreases

11

The previous demand was 10, 12, 9, and 11. The naïve forecast for the next period would be this.

If you want your forecast to be more responsive to changes in demand, you would choose a _________ smoothing constant.

larger

Aggregate planning typically covers a time horizon of what time?

2 months to 18 months

This option for altering demand is taking an order in one period and promising delivery in a later period.

Back orders

This is another name for uncommitted inventory.

Available to promise inventory

This is the portion of projected inventory which enables marketing to make realistic commitments about delivery dates for new orders.

Available to promise inventory

Using variable pricing in response to demand variability to maximize revenue using perishable capacity is known as this.

Yield management

Aggregate planning is capacity planning for what range?

The intermediate range.

When you want to achieve a consensus of expert opinion while preserving anonymity of participants, you would choose this type of qualitative forecast.

Delphi Method

These are the two most important factors in choosing a forecasting technique.

What are cost and accuracy?

Putting forecast errors into perspective is best done using this measure of forecast accuracy.

MAPE - Mean Absolute Percentage Error

MAPE depicts the forecast error relative to what was being forecast.

When you produce in-house instead of purchasing parts/inventory from a vendor, you can use this to determine how much to make per batch.

Economic Production Quantity

These are the two types of inventory counting systems.

Periodic and Perpetual (continuous)

A disadvantage of this type of inventory counting system is a lack of control between reviews and having to carry extra stock.

Periodic

You sell, on average, 8 king cakes a day. When you reorder king cakes, it takes 5 days for them to arrive. What is your reorder point to ensure you don't run out of king cakes before the new order arrives?

40. You reorder when you have 40 king cakes left. Yes, they will be stale.

The goal of EOQ is to minimize the total costs. When does this minimization occur? Think of the graph.

When holding costs and ordering costs are equal.

This describes an attempt to respond to predicted demand within the constraints set by product, process, and location decisions.

Aggregate Planning

Altering demand to match capacity is this type of aggregate planning strategy.

Chase Strategy

The purpose of this is to ensure a master schedule is feasible.

Rough cut capacity planning

This is the result of disaggregating the aggregate plan.

Master schedule

Moving from the aggregate plan to a master production schedule requires this. It's the middle item on a picture I showed you on a slide.

Disaggregation

This is a stock or store of goods.

Inventory

A typical firm has this percent of its working captital invested in inventory.

90%

There are 6 types of inventories. Name 3 of them.

Raw materials/purchased parts, WIP, finished goods, tools/supplies, MRO, pipeline inventory.

This is the ratio of annual cost of goods sold to the average inventory investment.

Inventory turnover ratio

Although I told you that you don't need to know this for the exam, it is still important. This is the average demand rate multiplied by the time in the system, which gives you the amount of inventory in a system at any given time.

Little's law

Which tool would produce the best aggregate plan if accurate inputs are used? It is computerized tool.

Linear Programming

This forecasting technique, also called associative forecasting, uses predictor variables to make forecasts.

Linear Regression

What is a potential downside to using Expert Opinion as a forecasting technique?

Group think or some panel members may be afraid to speak up.

Using the latest observation in a sequence of data to forecast the next period is called what?

The naive approach.

The two general approaches to forecasting are this.

Qualitative and Quantitative

In practice, the more commonly used techniques for aggregate planning are these.

Informal or trial and error techniques.

This type of inventory is held in excess of expected demand due to variable demand and/or lead time.

Safety stock

This is the model for ordering perishables and other items with limited useful lives.

Single-period model