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### 45 Cards in this Set

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 Adaptive smoothing The smoothing constant is automatically adjusted as a function of forecast error. Aggregate forecast An estimate of sales for a grouping produced by a facility. Aggregate plan Budgeted levels of goods, inventory, & backlog that support the production strategy. Alpha factor The weighting factor that is applied to the most recent demand. Smoothing constant. Base series A succession of values of demand-over-time data used in forecasting seasonal items. Consuming the forecast The process of reducing the forecast by customer orders. Correlation The relationship between two sets of data. If one changes, then the second changes too. Curve fitting A straight line, polynomial, or a curve that describes historical time series data. Decomposition Method of forecasting where time series data are separated: trend, seasonal, & cyclical. Delphi method A qualitative forecasting technique derived by the opinions of experts. Deviation The absolute difference between a number and the mean set of numbers. Distribution of forecast errors Tabulation of the forecast errors according to the frequency of occurrence of each value. Econometric model Equations designed to capture the way dependent & independent variables are interrelated. Exponential smoothing A weighted moving average where past observations are discounted according to their age. Extrapolation Projection. Estimation of the future value of some data series based on past observations. First order smoothing A weighted average approach that is applied to forecasting problems where the data do not exhibit significant patterns Focus forecasting Simulate numerous forecasting techniques to better select the most effective one. Forecast horizon The period of time into the future for which a forecast is prepared Frequency distribution Table that indicates the variation that data will fall into any number of subdivisions. Least-squares method Method of curve fitting that selects a line of best fit through a plot of data. Life cycle analysis A quantitative forecasting technique to apply past patterns of demand data to a new product. Mean The arithmetic average of a group of values Median Middle value in a set of measured values, when the items are arranged in order of magnitude Moving average The average value of a certain number of the most recent observations Noise Unpredictable or random difference between the observed data and the true process. Outlier A data point that differs significantly from other data for a similar phenomenon. Planning horizon The amount of time that a plan extends into the future. Covers a minimum of cumulative lead time. Product group forecast A forecast for a number of similar products Probability A number derived for a process to give the probable outcome of experimentation Forecast interval The time unit for which forecasts are prepared, such as week, month, or quarter. Probability distribution Numbers that indicate a frequency on how the results of an experiment should occur. Product group forecast A forecast for a number of similar products Pyramid forecasting A technique that enables mgmt to adjust and balance forecasts made at an aggregate level Random sample A selection of observations made with the same probability of selection. Regression analysis Describes the functional relationship between one response & independent variables. Safety capacity Planned amount by which the available capacity exceeds current productive capacity. Sample A portion of a universe of data chosen to estimate some characteristic about the whole universe Sampling distribution The distribution of values of a statistic calculated from samples of a given size. Seasonal index A number used to adjust data to seasonal demand Second-order smoothing A method for trend situations that employs two previously computed averages to extrapolate. Sigma a Greek letter commonly used to designate the standard deviation of a population. Skew The degree of nonsymmetry shown by a frequency or probability distribution. Smoothing constant The weighting factor that is applied to the most recent demand. Alpha factor. Trend forecasting models Methods for forecasting sales data when a definite upward or downward pattern exists. Weighted moving average Data to be averaged are not uniformly weighted, but are given values according to their importance.