Forecasting in Business

Expected level of demand and the degree of accuracy that can be assigned to a forecast

Short-range forecasts cover a shorter time period (e.g., an hour, day, week, or month), while long-range forecasts cover a longer time period (e.g., the next six months, the next year, or the life of a product or service).

Generally three months to three years

<p>Used for planning purchases, hiring, job assignments, production levels, and similar short-term decisions</p> Signup and view all the answers

<p>A combination of mathematical methods and intuition of the operations manager</p> Signup and view all the answers

<p>Short-term forecasts are more quantitative and use existing data, while medium and long-term forecasts are more comprehensive and support management decisions in planning products, processes, and plants.</p> Signup and view all the answers

<p>Forecasting is crucial for managing capacity, workforce, and supply chain to avoid issues like excess capacity, undependable delivery, loss of customers, and operating at a loss.</p> Signup and view all the answers

<p>The three main types of forecasts mentioned are: economic forecasts, technological forecasts, and demand forecasts.</p> Signup and view all the answers

<p>A new plant can take seven or eight years from the time it is thought of, until it is ready to move into and become functional.</p> Signup and view all the answers

<p>Short-term forecasts need to be updated regularly because a lot can change in three months, a year, three years, and longer, and the factors that could influence those forecasts change every day.</p> Signup and view all the answers