MGSC 395 Exam 3, Precht Questions With All Complete And Verified Solutions.

forecast - correct answers a prediction of future events used for planning purposes time series - correct answers the repeated observations of demand for a service or product in their order of occurrence time series pattern: horizontal - correct answers nearly flat over time time series pattern: trend - correct answers consistently rising or falling time series pattern: seasonal - correct answers varies in a repeatable pattern over seasons time series pattern: cyclical - correct answers less predictable than seasonal, longer cycle than seasonal demand, caused by the business cycle (economy) and the product life cycle complementary products - correct answers finding products and services that can be produced with the existing equipment or resources promotional pricing - correct answerspush sales with favorable pricing prescheduled appointments - correct answersfill available time with work reservations - correct answersused to fill the available resources - gives information in advance of the event to help determine if other actions are needed to increase demand revenue management - correct answersvarying price at the right time for different customer segments to maximize revenue from existing capacity backlogs - correct answersaccumulation of customer order promised for delivery at some future date (not late) backorders - correct answersa customer order that can't be filled when promised stockout - correct answersa customer order that is lost because it can't be fulfilled forecast error - correct answersmeasures error for a period of time, basis for other forecast error measures cumulative sum of forecast errors (bias) - correct answerssum or errors through that period, "bias error" when a consistent mistake is seen, variance will grow and represent a systematic deficiency in the forecast process average forecast error - correct answersknown as "mean bias". shows, on average, how far off the forecast is from actual demand mean squared error and standard deviation - correct answersmeasures dispersion of error, large errors get more weight mean absolute deviation - correct answerswidely used measure, its the mean of the absolute value of the error over a series of time periods mean absolute percent error - correct answersrelates forecast error to level of demand, converts mean absolute deviation to a percentage judgement methods - correct answers______ forecasts used contextual knowledge through experience - salesforce experience - executive opinion - market research - Delphi Method: gaining consensus from a group of experts while being anonymous casual method; a dependent variable is related to one or more independent variables by a linear equation, straight line, independent variables are assumed to "cause" the results observed in the past - correct answersLinear Regression sample correlation coefficient - correct answers"r", measures the direction of the relationship between the independent and dependent variable, range from -1 to 1 sample coefficient of determination - correct answers"r^2", measures the amount of variation in the dependent variable about its mean that is explained by the regression line, range from 0 to 1 standard error of the estimate - correct answers"Syx", measures how closely the data on the dependent variable cluster around the regression line naïve forecast - correct answersthe forecast for the next period equals the demand for the current period simple moving average - correct answershorizontal pattern, time series, choose demand for n periods to use to include in average weighted moving average - correct answershorizontal pattern, time series, puts importance on prior periods based on some logic you determine, each weight can be different but the sum must = 1 exponential smoothing - correct answershorizontal pattern, time series, weighted moving average that calculates the average of a time series; recent demands weight more that earlier ones cycle inventory - correct answersthe portion of inventory that varies directly with lot size pipeline inventory - correct answersinventory created when an order for an item is issued but not yet received (you have already paid) safety stock inventory - correct answersthis is used to avoid customer service problems and hidden costs of unavailable components anticipation inventory - correct answersinventory used to absorb uneven rates of demand or supply ABC analysis - correct answersthe process of dividing SKUs into three classes, according to their dollar usage, so that businesses can focus on items that have the highest dollar value class A - correct answers20% of SKUs, 80% dollar usage; reviewed frequently to reduce lot size and lead times to assure good performance by suppliers; because of high value you want a high inventory turnover rate class B - correct answers30% of SKUs, 15% dollar usage; less value = less control, some monitoring of suppliers but less frequent, can afford more safety stock here class C - correct answers50% of inventory SKUs, 5% dollar usage; less control is needed, some companies use open bins to store and make available to users; suppliers may be responsible to restock EOQ sensitivity: demand increase - correct answersEOQ increases EOQ sensitivity: set up costs decrease - correct answersEOQ decreases EOQ sensitivity: holding costs decrease - correct answersEOQ increases independent demand items - correct answersdemand that is influenced by market conditions and is not related to the inventory decisions for any other item held in stock or produced inventory position - correct answersmeasures the SKU's ability to meet future demand Q system characteristics - correct answers- frequency of tracking inventory levels: continuously - order quantities: fixed - time in between orders: variable - key feature: reorder point is calculated to determine when to reorder inventory to a fixed lot size - safety stock required: standard deviation of demand over lead time period (less than P system) - typical uses: restaurants or retail P system characteristics - correct answers- frequency of tracking inventory levels: periodically - order quantities: variable - time in between orders: fixed - key feature: target inventory level is established, on a defined frequency, order the difference between the inventory position and the target inventory level - safety stock required: standard deviation of demand over the time between reviews plus lead time - typical uses: supplier refilling inventory determining ROP steps - correct answers- step 1: select a service level - step 2: determine the distribution of demand during lead time - step 3: determine safety stock and reorder point protection interval (used in determining ROP, step 1) - correct answersthe period over which safety stock must protect the user from running out of stock service level (cycle service level) (used in determining ROP, step 1) - correct answersthe desired probability of not running out of stock in any one ordering cycle, which begins at the time an order is placed and ends when it arrives in stock two-bin system - correct answersa visual system version of the Q system in which a SKU's inventory is stored at two different locations; withdraw from one bin, when empty, send it back. then replenish the first bin before emptying the second periodic review system - correct answersan inventory system that is used to manage independent demand inventory where the inventory level for an item is checked at regular intervals and restocked to some predetermined level; calculating target inventory and the perio