Discussion Questions
1. Is there a difference between forecasting demand and
forecasting sales? Can demand be forecast from histori–
cal sales data?
2. What is the distinction between forecasting and planning?
3. Qualitative forecasting methods should be used only as
a last resort. Agree or disagree? Comment.
4. Describe the uses of qualitative, time-series, and causal
forecasts.
5. Qualitative forecasts and causal forecasts are not partic–
ularly useful as inputs to inventory and scheduling deci–
sions. Why is this statement true?
6. What type of time-series components would you expect
for the following products and services?
a. Monthly sales of a retail florist.
b. Monthly sales of milk in a supermarket.
c. Daily demand in a call center.
7. What are the advantages of exponential smoothing over
the moving average and the weighted moving average?
8. How should the choice of α be made for exponential
smoothing?
9. Describe the difference between fit and prediction for
forecasting models.
10. In the Stokely Company, marketing makes a sales fore–
cast by developing a sales force composite. Meanwhile,
operations makes a forecast of sales based on past data,
trends, and seasonal components. The operations fore–
cast usually turns out to be 20 percent less than the
forecast of the marketing department. How should
forecasting in this company be done?
11. Explain how CPFR can be used to reduce forecasting error.
12. Under what circumstances might CPFR be useful, and
when is it not useful?
