December 2014
Beginner
717 pages
29h 18m
English
book
Principles of Supply Chain Management, Second Edition, 2nd Edition
by Richard E. Crandall, William R. Crandall, Charlie C. Chen
Content preview from Principles of Supply Chain Management, Second Edition, 2nd Edition
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83Determining Customer Needs
unemployment rates, and government policies can inuence the sales volume of cars. All
these predictive variables would be considered independent variables and would appear
on the right of the formula to help forecast the sales volume of cars (the dependent variable).
Regression analysis has two major limitations. First, unlike exponential smoothing that
considers all past observations, the regression model only incorporates a predened set
of data based on the judgment of experts. Second, independent variables that are highly
related to each other should not all be included in the regression model. This condition,
known as multicollinearity, can cause the predicted demand to be inaccurate.
For a more complete d
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