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Causal relationship  A situation in which one event causes another. If the event is far enough in the future, it can be used as a basis for forecasting.
Collaborative Planning, Forecasting, and Replenishment (CPFR)  An Internet tool to coordinate forecasting, production, and purchasing in a firm's supply chain.
Dependent demand  Requirements for a product or service caused by the demand for other products or services. This type of internal demand does not need a forecast, but can be calculated based on the demand for the other products or services.
Exponential smoothing  A time series forecasting technique in which each increment of past demand data is decreased by (1 - α).
Focus forecasting  An approach to forecasting in which several different techniques are tried in a computer simulation and the best technique or combination of techniques is used to make the actual forecast.
Independent demand  Demand that cannot be directly derived from the demand for other products.
Linear regression forecasting  A forecasting technique that assumes that past data and future projections fall around a straight line.
Mean absolute deviation (MAD)  The average forecast error using absolute values of the error of each past forecast.
Smoothing constant alpha (α)  The parameter in the exponential smoothing equation that controls the speed of reaction to differences between forecasts and actual demand.
Smoothing constant delta (δ)  An additional parameter used in an exponential smoothing equation that includes an adjustment for trend.
Time series analysis  A type of forecast in which data relating to past demand are used to predict future demand.
Tracking signal  A measure that indicates whether the forecast average is keeping pace with any genuine upward or downward changes in demand.







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