Demand Forecasting in a Supply Chain

What is the definition of forecasting?

• A planning tool that helps management in its attempts to cope with the uncertainty of the future, relying mainly on data from the past and present and analysis of trends.

• The organization and coordination of the activities of a business in order to achieve defined objectives.

• The process of obtaining and managing of products or services needed to operate a business or other type of organization.

• A claim for a sum of money as due, necessary, or required.

Which option is not a role of forecasting in a supply chain?

• Push processes

• Pull processes

• Making supply chain to be more responsive and more efficent

• Long term forecasting forces the leaders and workers to work more

Which of these options are define the characteristics of forecasts?

• Appropriate flexibility is an effective approach for global supply chain to deal with variety of risks and uncertainities.

• Aggregate forecasts are usually more accurate than dissaggregate forecasts, as they tend to have a smaller standart deviation of error relative to the mean.

• Uncertainly in demand and economic factors should be included in the financial evaluation of supply chain design decisions.

• Forecasts are always inaccurate and should thus include both the expected value of the forecast and a measure of forecast error.

Which one of these options are not forecasting methods?

• Qualitative

• Quantitative

• Simulation

• Time series

Which component is not about numerous factors that are related to the demand forecast?

• State of economy

• Past demand

• Legal regulations of the state

• Actions that competitors have taken

Which of these points are important for an organization to forecast effectively?

• Understand the objective of forecasting.

• Forecast at the appropriate level of aggregation.

• Use multiple metrics to evaluate global supply chain networks.

• Establish performance and error measures for the forecast.

• Combine strategic planning and financial planning during global network design.

What is the definition of the "systematic component"?

• It measures the difference between the forecast and actual demand. On average, a good forecasting method has an error whose size is comparable to the random component of demand.

• It defines the process involved and the owners of each process. It's useful when considering operational decisions because it specifies the roles and responsibilities of each member of the supply chain and the desired outcome for each process.

• It measures the expected value of demand and consist of what we will call level, the current deseasonalized demand; trend, the rate of growth or decline in demand for the next period; and seasonality, the predictable seasonal fluctuations in demand.

• It defines, relative to its competitors, the set of customer needs that its seeks to satisfy through its product and services.

What is the definition of the "causal forecasting methods"?

• It use historical demand to make a forecast. They are based on the assumption that past demand history is a good indicator of future demand.

• It assume that the demand forecast is highly correlated with certain factors in environment (the state of the economy, interest rates, etc.)

• It imitate the consumer choices that give rise to demand to arrive at a forecast.

• They are primarily subjective and rely on human judgment.

Which option is false for objective of forecasting?

• Every forecast support decisions that are based on it, so an important first step is to identify these decisions clearly.

• Examples of such decisions include how much of a particular product to make, how much to inventory, and how much to order.

• All parties affected by a supply chain decision and the forecast.

• Sources of cost include flows of information, products, or funds between stages of the supply chain.

Which option is false for "Forecast at the appropriate level of aggregation"?

• The advantage of this approach is that it uses local market intelligence that each store manager has.

• The problem wtih this approach is that makes store managers forecast well before demand arises at a time when their forecasts are unlikely to be accurate.

• Given that aggregate forecasts are more accurate than disaggregate forecasts, it is important to forecast at a level of aggregation that is appropriate, given the supply chain decision that is driven by forecast.

• Appropriate flexibility is an effective approach for a global supply chain to deal with a variety of risks and uncertainties