Forecasting: A Comprehensive Overview PDF

FORECASTING FORECASTING Definitions Explanations Features Elements  The primary goal of operations management is to match supply to demand. FORECASTING Two aspects of forecasts a...

FORECASTING FORECASTING Definitions Explanations Features Elements  The primary goal of operations management is to match supply to demand. FORECASTING Two aspects of forecasts are important. One is the expected level of demand; the other is the degree of accuracy that can be assigned to a forecast. Forecasts play an important role in the planning process because they enable managers to anticipate the future so they can plan accordingly.  DEFINITIONS Accounting New product/ process cost estimates, profit projections, cash management. Finance Equipment/equipment replacement needs, timing and amount of funding/ borrowing needs. Human Resources Hiring activities, including recruitment, interviewing, and training; layoff planning, including outplacement counseling. Marketing Pricing and promotion, e-business strategies, global competition strategies.  DEFINITIONS MIS New/revised information systems, Internet services. Operations Schedules, capacity planning, work assignments and workloads, inventory planning, make-or-buy decisions, outsourcing, project management. Product/service design Revision of current features, design of new products or services.  Forecasts are not perfect actual results usually differ from predicted values; the presence of randomness precludes a perfect forecast. Allowances should be made for forecast errors. Forecasts for groups of items FEATURES Opportunities for grouping may arise if parts or raw materials are COMMON TO used for multiple products or if a product or service is demanded by ALL FORECAST a number of independent sources. Forecasting techniques Forecast accuracy generally assume that the same Generally speaking, short-range underlying causal system that forecasts must contend with fewer existed in the past will continue to uncertainties than longer-range exist in the future. forecasts, so they tend to be more accurate. ELEMENTS OF A GOOD FORECAST The forecast The should be The forecast The forecast forecast accurate, and should be should be should be the degree of reliable; it expressed in accuracy should work meaningful timely. should be consistently. units. stated. ELEMENTS OF A GOOD FORECAST The forecast The The forecasting should be cost- forecast technique should effective: The should be in be simple to benefits should writing. understand and use. outweigh the costs. FORECASTING CONCLUSION FORECASTING THANK YOU!