Causal relationship forecasting | Forecasting using independent variables other than time to predict future demand.
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Collaborative Planning, Forecasting, and Replenishment (CPFR) | An Internet tool to coordinate forecasting, production, and purchasing in a firm’s supply chain.
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Decomposition | The process of identifying and separating time series data into fundamental components such as trend and seasonality.
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Exponential smoothing | A time series forecasting technique using weights that decrease exponentially (1 – α) for each past period.
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Forecast error | The difference between actual demand and what was forecast.
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Linear regression forecasting | A forecasting technique that fits a straight line to past demand data.
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Mean absolute deviation (MAD) | The average of the absolute value of the actual forecast error.
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Mean absolute percent error (MAPE) | The average error measured as a percentage of average demand.
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Moving Average | A forecast based on average past demand.
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Smoothing constant alpha (α) | The parameter in the exponential smoothing equation that controls the speed of reaction to differences between forecasts and actual demand.
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Smoothing constant delta (δ) | An additional parameter used in an exponential smoothing equation that includes an adjustment for trend.
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Strategic forecasts | Medium and long-term forecasts that are used for decisions related to strategy and aggregate demand.
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Tactical forecasts | Short-term forecasts used for making day-to-day decisions related to meeting demand.
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Time series analysis | A forecast in which past demand data is used to predict future demand.
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Tracking signal | A measure of whether the forecast is keeping pace with any genuine upward or downward changes in demand. This is used to detect forecast bias.
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Weighted moving average | A forecast made with past data where more recent data is given more significance than older data.
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