| Collaborative Planning Forecasting, and Replenishment (CPFR) | An Internet tool to coordinate forecasting, production, and purchasing in a firm’s supply chain. |
| Dependent Demand | Requirements for a product or service caused by the demand for other products or services. This type of internal demand does not need a forecast, but can be calculated based on the demand for the other products or services. |
| Exponential Smoothing | A time series forecasting technique in which each increment of past demand data is decreased by (1 - α). |
| Independent Demand | Demand that cannot be directly derived from the demand for other products. |
| Linear Regression | Forecasting A forecasting technique that assumes that past data and future projections fall around a straight line. |
| Mean Absolute Deviation (MAD) | The average forecast error using absolute values of the error of each past forecast. |
| Smoothing Constant Alpha (α) | The parameter in the exponential smoothing equation that controls the speed of reaction to differences between forecasts and actual demand. |
| Smoothing Constant Delta (δ) | An additional parameter used in an exponential smoothing equation that includes an adjustment for trend. |
| Time Series Analysis | A type of forecast in which data relating to past demand are used to predict future demand. |
| Tracking Signal | A measure that indicates whether the forecast average is keeping pace with any genuine upward or downward changes in demand. |
