Im gonna fail

Forecasting short-term is how long, and what type of decision?

Tactical, less than 3 months

Forecasting medium-term is how long, and what type of decision?

3 months - 2 years developing a strategy

Forecasting long-term is how long?

Over 2 years, detect trends

What is the goal of forecasting and demand planning?

Minimize forecast error

What type of forecasting is Historical Analogy?

Qualitative, comparing history. It’s not math so its technically based on judgment comparing similar products “The Go-To for New Products”

What type of forecasting is time series?

Quantitative, assumption future is an extension of the past. Historical data is used to predict future demand.
Includes model types like Naive, Simply moving average, weighted moving average, exponential smoothing, linear trend. ALL MATH, unlike historical analogy. “The Go-To for established products”

What is naive forecasting and what type of product does it work well on?

Uses previous forecast, typically used on MATURE PRODUCTS since its unlikely it’ll change — stable demand. Like toilet paper, water bottles, boring items.

What is exponential smoothing, and what are the 3 basic elements?

Better version of weighted moving average. Elements: last period’s demand, last period’s forecast, and smoothing factor.

What is Cause and Effect Forecasting, and what are the 2 types of models?

Compare relationship between one dependent variable and series of independent variables. There is simple regression, and multiple regression.

Simple Linear Regression

Model relationship between ONE independent variable and dependent variable.
Ex. the demand might be dependent on how much money is spent on advertising and promotion: the more money spent, the higher the demand

Multiple Linear Regression

Model relationship between more than TWO independent variables, and a dependent variable.
Ex. the demand might be dependent on how much money is spent on advertising and promotion and also on the selling price charged for the product:

If advertising is increased and the price is lowered, it is likely that demand will go up.

If advertising is increased and the price is also increased, the impact on demand is not as obvious.

The more “granular” the forecast, the less accurate it is

True, remember this to be inverse.
“The less granular the forecast, the more accurate it is.”
“The more granular the forecast, the less accurate it is.”

What is forecast error?

Most forecasts are inaccurate, companies need to measure the size of error with units or %

What is forecast bias?

A consistent deviation from the mean in direction, either high or low.

Logistics Inbound

Incoming shipment

Logistics Outbound

Going out to customers

What are all the inputs? (5)

Materials, equipment, labor, money, time

What are results?

Revenue and profit

System principle

A supply chain is as strong as its weakest link

Core competencies

Outsourcing non-core work; keep core competencies (unique characteristics that makes business standout apart from competition)

Regression

links demand to other factors