Quantitative Forecasting Methods

Forecast is based on mathematical modeling.

Forecasting method in which a group of managers collectively develop a forecast.

Approach to forecasting that relies on surveys and interviews to determine customer preferences.

Approach to forecasting in which a forecast is the product of a consensus among a group of experts.

Based on the assumption that a forecast can be generated from the information contained in a time series of data.

A series of observations taken over time.

Based on the assumption that the variable being forecast is related to other variables in the environment.

Level or Horizontal Pattern

Pattern in which data values fluctuate around a constant mean.

Pattern in which data exhibit increasing or decreasing values over time.

Any pattern that regularly repeats itself and is constant in length.

Data patterns created by economic fluctuations.

Unexplained variation that cannot be predicted.

Forecasting method that assumes next period's forecast is equal to the current period's actual value.

Simple Moving Average

A forecasting method in which only n of the most recent observations are averaged.

Weighted Moving Average

A forecasting method in which n of the most recent observations are averaged and past observations may be weighted differently.

Exponential Smoothing Model

Uses a sophisticated weight average procedure to generate a forecast.

Trend-Adjusted Exponential Smoothing

Exponential smoothing model that is suited to data that exhibit a trend.

Percentage amount by which data for each season are above or below the mean.

Procedure that models a straight-line relationship between two variables.

Correlation Coefficient

Statistic that measures the direction and strength of the linear relationship between two variables.

Difference between forecast and actual value for a given period.

Mean Absolute Deviation (MAD)

Measure of forecast error that computes error as the average of the sum of the absolute errors.

Mean Squared Error (MSE)

Measure of forecast error that computes error as the average of the squared error.

A persistent tendency for a forecast to be over or under the actual value of the data.

Tool used to monitor the quality of a forecast.

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QDM Exam #2

Ch. 8

Question	Answer
Quantitative Forecasting Methods	Forecast is based on mathematical modeling.
Executive Opinion	Forecasting method in which a group of managers collectively develop a forecast.
Market Research	Approach to forecasting that relies on surveys and interviews to determine customer preferences.
Delphi Method	Approach to forecasting in which a forecast is the product of a consensus among a group of experts.
Time Series Models	Based on the assumption that a forecast can be generated from the information contained in a time series of data.
Time Series	A series of observations taken over time.
Causal Models	Based on the assumption that the variable being forecast is related to other variables in the environment.
Level or Horizontal Pattern	Pattern in which data values fluctuate around a constant mean.
Trend	Pattern in which data exhibit increasing or decreasing values over time.
Seasonality	Any pattern that regularly repeats itself and is constant in length.
Cycles	Data patterns created by economic fluctuations.
Random Variation	Unexplained variation that cannot be predicted.
Naive Method	Forecasting method that assumes next period's forecast is equal to the current period's actual value.
Simple Mean or Average	The average of a set of data.
Simple Moving Average	A forecasting method in which only n of the most recent observations are averaged.
Weighted Moving Average	A forecasting method in which n of the most recent observations are averaged and past observations may be weighted differently.
Exponential Smoothing Model	Uses a sophisticated weight average procedure to generate a forecast.
Trend-Adjusted Exponential Smoothing	Exponential smoothing model that is suited to data that exhibit a trend.
Seasonal Index	Percentage amount by which data for each season are above or below the mean.
Linear Regression	Procedure that models a straight-line relationship between two variables.
Correlation Coefficient	Statistic that measures the direction and strength of the linear relationship between two variables.
Forecast Error	Difference between forecast and actual value for a given period.
Mean Absolute Deviation (MAD)	Measure of forecast error that computes error as the average of the sum of the absolute errors.
Mean Squared Error (MSE)	Measure of forecast error that computes error as the average of the squared error.
Forecast Bias	A persistent tendency for a forecast to be over or under the actual value of the data.
Tracking Signal	Tool used to monitor the quality of a forecast.

Created by: bradbrown1122

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