SCM Exam 2 chapter 5

Real value of CPFR comes from

sharing of forecasts among firms

Naïve Forecast

the estimate of the next period is equal to the demand in the past period

The real value of CPFR comes from

Firms exchanging forecasting information

CPFR relies heavily on?

Firms sharing information

top three challenges for CPFR?

-Difficulty making internal changes -Trust -Cost

The formula for forecast error is calculated by using the equation

Actual demand for period t minus the forecasted demand for period t

Proper demand forecasting enables _____________________ for businesses to be competitive.

Better planning and utilization of resources

It is a business practice that combines the intelligence of multiple trading partners in the planning & fulfillment of customer demands. It links sales & marketing best practices, such as category management, to supply chain planning processes to increase availability while reducing inventory, transportation & logistics costs.

CPFR- Collaborative Planning, Forecasting, & Replenishment

Which forecasting method would use the size of the advertising budget as a variable in the forecasting technique?

Cause-and-Effect forecasting

According to the text, for long-term forecasts, it is recommended that which type of forecasts be used?

Combination of both qualitative and quantitative

A company is conducting forecasting that revolves around the global recession and real estate crises. This type of forecasting can be referred to as what component of a time series?

Cyclical Variations

Types of qualitative forecasting

Delphi method Consumer survey Jury of executive opinion Sales force composite

The impact of poor communication and inaccurate forecasts along the supply chain can cause:

Material shortages

Which type of forecasting technique would a firm likely use when launching a new product and historical data does not exist?

Qualitative

assumes one or more factors (independent variables) predict future demand -All quantitative methods become less accurate as forecast's time horizon increases

Quantitative Methods-Cause & Effect forecasting

assumes the future is an extension of the past -Historical data is used to predict future demand

Quantitative Methods-Time series forecasting

uses historical data to generate a forecast. Works well when demand is stable over time

Simple Moving Average Forecast

What component of a time series is based on increasing or decreasing movements over many years and are due to factors such as population growth, population shifts, cultural changes, and income shifts?

Trend Variations

Determine if the forecast bias is within the acceptable control limits

a tracking signal

-Provides analysis of sales and order forecasts -Allows collaboration on future requirements and plans -Strengthens partner relationships

benefits of CPFR

-Smoother production plans -Reduced stock outs -Improved customer service

benefits of better forecasts