• Question 1: Think of some of the leading indicators that could be used as a ma

Question

• Question 1: Think of some of the leading indicators that could be used as a major input to causal forecasts in the economy. Discuss their use.
• Question 2: Which type of forecasts would most likely be used for Sales and Operations Planning (S&OP), and why are they the most appropriate?
• Question 3: What value does it bring to an operation if a forecasting method is used that only forecasts for families of products?
• Question 4: Think of at least three products recently introduced that would probably use life-cycle analogy. What products would they “copy”? Why is life-cycle appropriate for those products?
• Question 5: How should a company include information for their forecast that indicates the economy is headed for a recession? How, if at all, should that information impact time-series forecasting information?
• Question 6: Discuss the arguments for using a large smoothing constant for exponential smoothing instead of a small one. Under what conditions would each be better? Why?
• Question 7: Describe in your own words why using the MAD is better for describing the forecast error than is the MFE. What is the major use of each? Should they really be used together? Why or why not?

Explanation / Answer

Question-1: Casual forcasting.

casual forcasting mainly focuses on practically possible and statistically approved analysis between dependent and independent variables.

Indicator or model of casual forcast: Regression - This is the most popular model , so we took this as an indicator.

Regression model: the main reason for Regression model to be used as popular casual forccasting is that it is statistically improved model. In causal forecasting models one can try to predict a dependent variable using a single independent variable. Regression model builts up statistically bond between dependent and independent variable.

USES : 1. It is mainly used to analyse the relationship between dependent and independent variables 2. it establishes statistical reasoning for forccasting 3. It helps to estimate strength of two linear equations. 4 .It is used to arrive at mathematical function which takes between variables , at same time it is practically approved . 5.It is used to analyse the effect of various factors that affects business sales and profit as well as cost reduction. 6. As it based on statistical concept it helps to reduce overlapping and also reduces errors while analysing data. 7. When we want to take crucial decions it helps to do that by providing sufficient confidence .

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