Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

10.8.1 Exercise: Choice of Appropriate Forecasting Techniques

Intended learning outcomes: Propose a forecasting technique for different products to apply to forecast future demand.

Figure shows historical demand curves for four different products. What forecasting technique for each product do you propose to apply to forecast future demand?

Fig.      Historical demand curves for four products.

- Product 1: demand with linear trend —> linear regression
- Product2: constant demand without trend —> moving average forecasting or first-order exponential smoothing
- Product 3: seasonal fluctuations with trend —> linear regression or second-order exponential smoothing with seasonality
- Product 4: constant demand with seasonal fluctuation —> moving average forecasting, or first-order exponential smoothing, with seasonality

    Course section 10.8: Subsections and their intended learning outcomes

    • 10.8 Scenarios and Exercises

      Intended learning outcomes: Choose an appropriate forecasting technique. Calculate an example for the moving average forecasting technique and for the first-order exponential smoothing technique. Differentiate between the moving average forecast and the first-order exponential smoothing forecast.