Naïve Methods Naïve Forecast – uses a single previous value of a time series as the basis of a forecast. Techniques for Averaging • What is the purpose of averaging? • Common Averaging Techniques o Moving Averages o Exponential smoothing Moving Average Exponential Smoothing Techniques for Trend Linear Trend Equation Curvilinear Trend Equation Techniques for Seasonality • What is seasonality? • What are seasonal
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FORECASTING FUNDAMENTALS Forecast: A prediction‚ projection‚ or estimate of some future activity‚ event‚ or occurrence. Types of Forecasts * Economic forecasts * Predict a variety of economic indicators‚ like money supply‚ inflation rates‚ interest rates‚ etc. * Technological forecasts * Predict rates of technological progress and innovation. * Demand forecasts *
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FORECASTING FORECASTING The Role of the Manager Planning Organizing Staffing Leading Controlling Future ? Data Information • Short-range • Medium-range • Long-range Features Common to All Forecasts Forecasting techniques generally assume that same underlying causal system that existed in the past will continue to exist in the future. Forecasts are rarely perfect. Forecasts for groups of items tend to be more accurate than forecasts for individual items. Forecast
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Excel Chapter 8 Test 1) Match each term with the correct definition (15 points) A sequence of averages computed from parts of a data series that smoothes fluctuations in data to show a trend more clearly. Moving average In a moving average‚ the number of cells to include in the average. Interval Expenses that remain the same each month. Fixed expenses A point at which an entity covers its costs and starts to make a profit. Break-even A what-if
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Sales Volume 10000 12400 14250 15750 20500 18500 15750 20500 21500 22550 6. Using Data Set E1‚ what would be the forecast for period 7 using a four period moving average: (Choose the closest answer.) a. 17625 b. 15225 c. 15300 d. 17250 7. Using Data Set E1‚ what would be the forecast for period 6 using a five period weighted moving average? The weights for each period are 0.05‚ 0.10‚ 0.20‚ 0.30‚ and 0.35 from the oldest period to the most recent period‚ respectively. (Choose the
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For example‚ raw materials for the leather jackets need to be ordered 8 months ahead. And‚ in the short term‚ food and labor for daily operations should be forecasted. Hard Rock uses many of the forecasting techniques as: moving averages‚ weighted moving averages‚ exponential smoothing‚ and regression analysis. They start forecasting at the unit level every month‚ then take it to the quarter‚ and then to a year. All this data is compared to previous years and to the budget expectation to make
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output‚ t = -.412 and p = .689. A stationary model seems appropriate since the linear term‚ Period‚ is not significant. 7.1 c. Forecast for January -- 19‚ for upcoming year – 12*19 = 228 7.1 d. Forecast for January -- 20.4 e. 4 month moving average. MAD is 1.72 7.2 See files Ch7.2a.xls and Ch7.2b.xls a. Forecast for January -- 18.86 7.2 b. See file Ch7.2b.xls Forecast for January -- 20.28 c. = .6 gives the lower MSE 7.3 See file Ch7.3.xls a. b. Coefficients
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ActualForecastErrorError1011-11810-22108 2266 0098 11 FCT 3 What is the forecast for May based on a weighted moving average applied to the following past demand data and using the weights .5‚ .3‚ .2 (largest weight is for most recent data) Nov.Dec.Jan.Feb.Mar.April373640424743 FCT 4 Weekly sales of ten-grain bread at the local Whole Foods Market are in the table below. Based on this data‚ forecast week 9 using a three-week moving average. Week Sales 1 415 2 389 3 420 4 382 5 410 6 432 7 380 8 410 FCT 4 Most forecasting
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Pharos University Faculty of Financial & Administrative Sciences O PERATIONS M ANAGEMENT B y: Dr. Ola E lgeuoshy S pring 2013 C hapter (3) F orecasting F ORECASTING “ a Statement about the future value of a variable of i nterest .” U ses of Forecasting: Accounting Cost/profit estimates Finance Cash flow and funding Human Resources Hiring/recruiting/training Marketing Pricing‚ promotion‚ strategy MIS IT/IS systems‚ services Operations Schedules‚ MRP
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ISQS 3344 Test 1 review Chapter 1 What employers want The ability to think cross functionally Working in teams and collaborative learning Increase productivity and knowledge by 50% Operations management- the science and art of ensuring that goods and services are created and delivered successfully to customers. Planning Directing Controlling Organizing Government regulations- California 2006 Increase mpg standard for all vehicles or pay fine Lots of hybrids sold but companies
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