## Glossary of APICS MPR Forecasting

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- Adaptive smoothing
- The smoothing constant is automatically adjusted as a function of forecast error.

- Aggregate forecast
- An estimate of sales for a grouping produced by a facility.

- Aggregate plan
- Budgeted levels of goods, inventory, & backlog that support the production strategy.

- Alpha factor
- The weighting factor that is applied to the most recent demand. Smoothing constant.

- Base series
- A succession of values of demand-over-time data used in forecasting seasonal items.

- Consuming the forecast
- The process of reducing the forecast by customer orders.

- Correlation
- The relationship between two sets of data. If one changes, then the second changes too.

- Curve fitting
- A straight line, polynomial, or a curve that describes historical time series data.

- Decomposition
- Method of forecasting where time series data are separated: trend, seasonal, & cyclical.

- Delphi method
- A qualitative forecasting technique derived by the opinions of experts.

- Deviation
- The absolute difference between a number and the mean set of numbers.

- Distribution of forecast errors
- Tabulation of the forecast errors according to the frequency of occurrence of each value.

- Econometric model
- Equations designed to capture the way dependent & independent variables are interrelated.

- Exponential smoothing
- A weighted moving average where past observations are discounted according to their age.

- Extrapolation
- Projection. Estimation of the future value of some data series based on past observations.

- First order smoothing
- A weighted average approach that is applied to forecasting problems where the data do not exhibit significant patterns

- Focus forecasting
- Simulate numerous forecasting techniques to better select the most effective one.

- Forecast horizon
- The period of time into the future for which a forecast is prepared

- Frequency distribution
- Table that indicates the variation that data will fall into any number of subdivisions.

- Least-squares method
- Method of curve fitting that selects a line of best fit through a plot of data.

- Life cycle analysis
- A quantitative forecasting technique to apply past patterns of demand data to a new product.

- Mean
- The arithmetic average of a group of values

- Median
- Middle value in a set of measured values, when the items are arranged in order of magnitude

- Moving average
- The average value of a certain number of the most recent observations

- Noise
- Unpredictable or random difference between the observed data and the true process.

- Outlier
- A data point that differs significantly from other data for a similar phenomenon.

- Planning horizon
- The amount of time that a plan extends into the future. Covers a minimum of cumulative lead time.

- Product group forecast
- A forecast for a number of similar products

- Probability
- A number derived for a process to give the probable outcome of experimentation

- Forecast interval
- The time unit for which forecasts are prepared, such as week, month, or quarter.

- Probability distribution
- Numbers that indicate a frequency on how the results of an experiment should occur.

- Pyramid forecasting
- A technique that enables mgmt to adjust and balance forecasts made at an aggregate level

- Random sample
- A selection of observations made with the same probability of selection.

- Regression analysis
- Describes the functional relationship between one response & independent variables.

- Safety capacity
- Planned amount by which the available capacity exceeds current productive capacity.

- Sample
- A portion of a universe of data chosen to estimate some characteristic about the whole universe

- Sampling distribution
- The distribution of values of a statistic calculated from samples of a given size.

- Seasonal index
- A number used to adjust data to seasonal demand

- Second-order smoothing
- A method for trend situations that employs two previously computed averages to extrapolate.

- Sigma
- a Greek letter commonly used to designate the standard deviation of a population.

- Skew
- The degree of nonsymmetry shown by a frequency or probability distribution.

- Smoothing constant
- The weighting factor that is applied to the most recent demand. Alpha factor.

- Trend forecasting models
- Methods for forecasting sales data when a definite upward or downward pattern exists.

- Weighted moving average
- Data to be averaged are not uniformly weighted, but are given values according to their importance.