Question: Which of the following statement is the first step involved in demand forecasting?
A Select the items to be forecasted
B Select the forecast model(s)
C Determine the use of the forecast
D Determine the time horizon of the forecast
Answer: Determine the use of the forecast
| Aspect |
Description |
| Determine the use of the forecast |
First step involved in demand forecasting is to define the purpose of the forecast |
| Select the items to be forecasted |
Identify the specific items and variables that will be the subject of the forecast. |
| Determine the time horizon of the forecast |
Specify the period for which the forecast is being needed |
| Collect historical data |
Gather relevant historical data on the items being forecasted. |
| Choose Forecasting methods |
Select appropriate methods for forecasting. |
| Validate and refine the model |
Evaluate the accuracy of the chosen forecasting model and make adjustments if needed. |
| Generate the forecast |
Use the selected model to generate the forecast for the specified time horizon. |
| Communicate and monitor |
Share the forecast results with stakeholders and continuously monitor forecast data. |
| Make informed decisions |
Use the forecast to support decision-making process. |
| Review and improve |
Periodically assess the accuracy and performance of the forecasting system and make improvements if needed. |
