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BUSI 411 - Key Terms Chs. 3 and 4
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BUSI 411 – Key Terms
Ch. 3 and 4
Associative Model: forecasting technique that uses explanatory variables to predict
future demand.
Bias: persistent tendency for forecasts to be greater or less than the actual values of a
time series.
Centered Moving Average: a moving average positioned at the center of the data that
were used to compute it.
Control Chart: a visual tool for monitoring forecast errors
Correlation: a measure of the strength and direction of relationship between two
variables.
Cycle: wavelike variations lasting more than one year.
Delphi Method: an iterative process in which managers and staff complete a series of
questionnaires, each developed from the previous one, to achieve a consensus forecast.
Error: difference between the actual value and the value that was predicted for a given
period.
Exponential Smoothing: a weighted average method based on the previous forecast plus
a percentage of the forecast error.
Focus Forecasting: using the forecasting method that demonstrates the best recent
success.
Forecast: a statement about the future value of a variable of interest.
Irregular Variation: caused by unusual circumstances, not reflective of typical behavior.
Judgmental Forecasts: forecasts that use subjective inputs such as opinions from
consumer surveys, sales staff, managers, executives, and experts.
Least Squares Line: minimizes the sum of the squared vertical deviations around the
line.
Linear Trend Equation: Ft=a+b , used to develop forecasts when trend is present.t
Mean Absolute Deviation (MAD): the average absolute forecast error.
Mean Absolute Percent Error (MAPE): the average absolute percent error.
Mean Squared Error (MSE): the average of squared forecast errors.
Moving Average: technique that averages a number of recent actual values, updated as
new values become available.
Naïve Forecast: a forecast for any period that equals the pervious period’s actual value.
Predictor Variables: variables that can be used to predict values of the variable of
interest.
Random Variations: residual variations after all other behaviors are accounted for.
Regression: technique for fitting a line to a set of points
Seasonality: short-term regular variations related to the calendar or time of day.
Seasonal Relative: percent of average or trend.
Seasonal Variations: regularly repeating movements in series values that can be tied to
recurring events.
Standard Error of Estimate: a measure of the scatter of points around a regression line.
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BUSI 411 - Key Terms Chs. 3 and 4
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Time Series: a time-ordered sequence of observations taken at regular intervals.
Timer-Series Forecasts: forecasts that project patterns identified in recent time-series
observations.
Tracking Signal: the ratio of cumulative forecast error to the corresponding value of
MAD, used to monitor a forecast.
Trend: a long-term upward or downward movement in data.
Trend-Adjusted Exponential Smoothing: variation of exponential smoothing used
when a time series exhibits a linear trend.
Weighted Average: more recent values in a series are given more weight in computing a
forecast.
Ch. 4
Computer-Aided Design (CAD): product design using computer graphics
Concurrent Engineering: bringing engineering design and manufacturing personnel
together early in the design phase.
Cradle-to-Grave Assessment: the assessment of the environmental impact of a product
or service throughout its useful life.
Delayed Differentiation: the process of producing, but not quite completing, a product
or service until customer preferences are known.
Design for Assembly (DFA): design that focuses on reducing the number of parts in a
product and on assembly methods and sequence
Design for Disassembly (DFD): design so that used products can be easily taken apart.
Design for Manufacturing (DFM): the designing of products that are compatible with
an organization’s capabilities.
Design for Recycling (DFR): design that facilitates the recovery of materials and
components in used products for reuse.
Failure: situation in which a product, part, or system does not perform as intended.
Manufacturability: the capability of an organization to produce an item at an acceptable
profit.
Mass Customization: a strategy pf producing basically standardized goods but
incorporating some degree of customization.
Modular Design: a form of standardization in which component parts are grouped into
modules that are easily replaced or interchanged.
Normal Operating Conditions: the set of conditions under which an item’s reliability is
specified.
Product Bundle: the combination of goods and services provided to a customer.
Product Liability: the responsibility of a manufacturer for any injuries or damages
caused by a faulty product.
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Product Life Cycle Management (PLM): a systematic approach to managing the series
of changes a product goes through, from its conception to its end-of-life.
Quality Function Deployment (QFD): an approach that integrated the “voice of the
customer” into both product and service development.
Recycling: recovering materials for future use.
Reliability: the ability of a product, part, or system to perform its intended function
under a prescribed set of conditions.
Remanufacturing: refurbishing used products by replacing worn-out or defective
components.
Research and Development (R & D): organized efforts to increase scientific knowledge
or product innovation.
Reverse Engineering: dismantling and inspecting a competitor’s product to discover
product improvements.
Robust Design: design that results in products or services that can function over a broad
range of conditions.
Service: something that is done to or for a customer.
Serviceability: the capability of an organization to provide a service at an acceptable cost
or profit.
Service Blueprint: a method used in service design to describe and analyze a proposed
service.
Service Delivery System: the facilities, processes, and skills needed to provide a service.
Service Package: the physical resources needed to perform the service, the
accompanying goods, and the explicit and implicit services included.
Standardization: extent to which a product, service, or process lacks variety.
Uniform Commercial Code: a product must be suitable for its intended purpose.
Value Analysis: examination of the function of parts and materials in an effort to reduce
cost and/or improve product performance.
