goods and services chapter 4 part 6

+/- 4

Some inventory experts suggest using tracking signal control limits of _________ for high volume items and +/-8 for low volume items

absolute

________ measures of forecast accuracy are expressed in teh same unit of measurement as the data (an acutal number)

relative

________ measurse of forecast accuracy provide a perspective of teh magnitude of the forecast error relative to actual demand (percentage)

zero

a _____ RSFE (and MFE) indicates taht the forecast is unbiased

zero

a ______ RSFE (and MFE) does not imply that the forecast was necessarily accurate, since a forecast could have very large negative and positive erros and still have a zero bias

negative

a _______ RSFE (and MFE) indicates that the forecasts generally are high--the forecasts overestimate demand resulting in higher inventory carrying costs

positive

a ________ RSFE (and MFE) indicates that the forecasts generally are low-the forecasts underestimate demand and stock-outs may occur

control chart

a ___________ is often used to monitor the tracking signal

greater

a mean absolute deviation value ______ than zero indicates that the forecast either overestimates or underestimates demand

overestimate

a negative RSFE (and MFE) indicates that the forecasts generally are high--the forecasts ________ demand resulting in higher inventory carrying costs

underestimate

a positive RSFE (and MFE) indicates that the forecasts generally are low--the forecasts _________ demand and stockouts may occur

accurate

a zero RSFE (and MFE) does not imply that the forecast was necessarily _______, since a forecast could have very large negative and positive errors and still have a zero bias

unbiased

a zero RSFE (and MFE) indicates that the forecast is ________

18%

according to a recent survey, only _____ of the surveyed companies had forecast accuracy exceeding 90%

forecast

actual-forecast= what? to remember, A comes before F in the alphabet

tighter

as _________ limits are instituted, there is a greater probability of finding exceptions that require not action, but this also means catching changes in demand sooner (more forecast errors showing up, but not all of them would be problematic)

forecasting

every business decision is made on __________

accuracy

for all measures of forecast ______, the closer the measure is to zero, the better the forecast

zero

for all measures of forecast accuracy, the closer the meausure is to ______, the better the forecast

mistakes

if our measure of forecast accuracy is close to zero, it means we don't have many ________ in our forecast

falls outside

if the tracking signal ___________ present control limits, there is a bias problem with the forecast method and reevaluation of the forecast method is warranted

not desirable

in general, models that yield forecasts with many small errors and a few large ones are _______________

+/- 8

some inventory experts suggest using tracking signal control limits of +/4 for high volume items and _______ for low volume items

large

the Mean Squared Error is especially sensitive to ______ errors

zero

the ______ Mean Absolute Deviation (MAD) indicates that the forecast exactly predicted demand over the entire evaluation period

prediction error

the cost associate with __________ can be substantial and include the cost of lost sales, safety stock, unsatisfied customers, and loss of goodwill

forecast error

the difference between actual demand and the forecast; it is used to evaluate the accuracy of the forecast model

direction

the mean absolute deviation measures the average magnitude of the forecast errors withou regard to the ________ of error

relative

the mean absolute percent error (MAPE) is a _______ measure for evaluating forecast accuracy

magnitude

the mean absolute percent error (MAPE) measures the average relative ________ of the forecast errors, expressed as a percentage

actual demand

the mean absolute percent error (MAPE) standardizes each forecast error with respect to the ___________

accurate

the ultimate goal of any forecasting endeavor is to have an ______ and unbiased forecast

unbiased

the ultimate goal of any forecasting endeavor is to have an accurate and _______ forecast

bias

this represents the tendency of a forecast to be consistently higher or lower than actual demand (we want it to be as close to zero as possible)

tracking signal

tracks forecast bias (higher or lower) to the average magnitude (size of the error) of the forecast error

tracking signal

used to monitor the performance of a forecast over time and is updated after every period

absolute forecast accuracy

what do these measure? running sum of forecast error (RSFE) mean forecast error (MFE) mean absolute deviation (MAD) mean squared error (MSE)

high volume items

what is the name for items we buy all the time, like bananas

comparison

what is the primary reason for the mean absolute deviation?

running sum of forecast error (RSFE)

which formula measures the average magnitude or size of teh forecast errors (i.e. central tendency) or bias