Reference no: EM132836788

Scenario: What are a couple types of demand forecast models you would need for your short-term planning,

You are the regional operations manager responsible for 20 restaurants.

And what decisions would each forecast support?

Data:

Demand Forecasting: Types, Methods, and Examples | Red Stag Fulfillment

Data:

• Forecasting methods fall into two categories: judgment-based and statistical model-based methods. Judgment-based approaches gather inputs through grassroots methods, executive judgment, focused forecasting, historical analogy, market research, and the Delphi method.
• Operations managers may develop naive forecasts or employ much more sophisticated methods. Both accuracy and bias should be considered in the evaluation of forecasting errors. Mean forecast error (MFE) and mean percentage error (MPE) are good at measuring bias, while metrics such as mean absolute deviation (MAD), mean squared error (MSE), root mean squared error (RMSE), and mean absolute percentage error (MAPE) are used to monitor forecast accuracy. Managers often set up tracking signals for forecasting systems so that they can be notified when forecast errors become unusually large. This type of monitoring of forecasting performance leads to continuous updating and improvement of forecasting models. Demand management involves varying the price, promotion, or availability of the product or service in order to increase, decrease, or shift the pattern of expected demand. By improving supply chain constraints, operations managers can make the system more responsive to actual demand and less sensitive to forecast error.