03
MGMT 6332 / Forecasting
Forecasting
Use demand forecasts to support planning decisions and resource choices.
The Management Question
What decision does this operating system need managers to make?
What is it?
Use demand forecasts to support planning decisions and resource choices.
How does it work?
Learn the concept -> work through the operating logic -> apply it to the project.
Why does it matter?
The topic gives students a practical lens for improving real operating systems.
Next step
Open the lecture
Move into the interactive lecture experience for this topic.
Agenda - Week 03
Why Forecast?
How forecasts drive capacity, inventory, staffing, scheduling, and service decisions
Models
Useful simplification, model fit, and the Greenland/Mercator map analogy
Basic Concepts
Forecast horizon, time series patterns, and pattern recognition
Moving Average
Build a simple moving-average forecast in Excel and measure forecast error
Exponential Smoothing
Change alpha in Excel and compare how quickly forecasts respond to new demand
Regression
Use scatterplots, trendlines, R-squared, and multiple regression to connect demand to drivers
Reality Gets Messy
Seasonality, human judgment, wisdom of crowds, and prediction markets
Putting It Together
Choose the right forecasting tool and apply it to the coffee shop and project challenge
Learning Objectives
After this week, you will be able to:
Describe the importance of forecasting to the value chain.
Explain basic concepts of forecasting and time series.
Explain how to apply simple moving average and exponential smoothing models.
Describe how to apply regression as a forecasting approach.
Explain the role of judgment in forecasting.
Describe how statistical and judgmental forecasting techniques are applied in practice.
