Tqm - ch.7

• is the process of projecting the values of one or more variables into the future.

  Forecasting
• It  can result in poor inventory and staffing decisions, resulting in part shortages, inadequate customer service, and many customer

  Poor forecasting
• in the length of time on which a forecast is based

  Planning horizon
• is the unit of measure for the time period used in a forecast.

  Time bucket
• is a set of observations measured at successive points in time or over successive periods of time.

  Time series
• is the underlying pattern of growth or decline in a time series.

  Trend
• are characterized by repeatable periods of ups and downs over short periods of time.

  Seasonal patterns
• Are  regular pat terns in a data series that take place over long periods of time

  Cyclical patterns
• (sometimes called noise) is the unexplained deviation of a time series from a predictable pattern such as a trend, seasonal, or cyclical pattern.

  Random variations
• is a one-time variation that is explainable.

  Irregular variation
• is the difference between the observed value of the time series and the forecast,

  Forecast error
• MSE is probably the most commonly used measure of forecast accuracy. (Sometimes the square root of MSE is computed, this is called the

  Root mean square error (RMSE)
• is based on the assumption that the future will be an extrapolation of the past

  Statiscal forecasting
• is an average of the most recent "k" observations in a time series.

  Moving average forecast
• is a method for building a statistical model that defines a relationship between a single dependent variable and one or more independent variables, all of which are numerical

  Regression analysis
• A linear regression model with more than one independent variable is called

  Multiple linear regression model
• relles upon opinions and expertise of people in developing forecasts.


  Judgemental forecasting
• is asking those who are close to the end consumer, such as salespeople, about the customers' purchasing plans.

  Grassroot forecasting
• consists of forecast- ing by expert opinion by gathering judgments and opinions of key personnel based on their experience and knowledge of the situation.

  Delphi method
• provides a method for doing this by quantifying bias-the tendency of forecasts to consistently be larger or smaller than the actual values of the time series.

  Tracking signal