CHAPTER THREE

FORECASTING

1. How forecasting helps Operation Manager in the manufacturing and service industry?
Explain.

2. How accuracy can be developed in forecasting? Justify it with the help of good elements.

3. What are the key steps in the process of forecasting? Explain with the help of examples.

4. What are the various dimensions of operation management decision area? How it affects
each dimension? Explain.

5. How forecasting techniques can be applied in the file of operation management? Explain
with the help of both quantitative and qualitative approach.

6. How can you choose a good forecasting technique in the field of operation management?
Explain with the help of suitable examples.

7. What are the main advantages that quantitative techniques for forecasting have over
qualitative techniques? What limitations do quantitative techniques have?

8. When a new business is started, or a patent idea needs funding, venture capitalists or
investment bankers will want to see a business plan that includes forecast information
related to a profit and loss statement. What type of forecasting information do you suppose
would be required?

9. Which type of forecasting approach, qualitative or quantitative, is better?

10. How is forecasting in the context of a supply chain different from forecasting for just a
single organization? List possible supply chain benefits and discuss potential difficulties in
doing supply chain forecasting.

11. Explain how flexibility in production systems relates to the forecast horizon and forecast
accuracy.

12. Suppose a software producer is about to release a new version of its popular software. What
information do you think it would take into account in forecasting initial sales?

Page 1 of 2
13. It has been said that forecasting using exponential smoothing is like driving a car by looking
in the rear-view mirror. What are the conditions that would have to exist for driving a car
that are analogous to the assumptions made when using exponential smoothing?

14. What capability would an organization have to have to not need forecasts?

15. Why forecasting techniques are essential for the operation manager? Which type of
forecasting approach is superior, qualitative or quantitative? Give your arguments.

16. Short notes on:

Naïve forecast

Exponential smoothing

The consequences of poor forecasts

Page 2 of 2