4-AND-5

MODULE 4: FORECASTING reviewed for reasonableness, then
aggregated.
1.4 Consumer Market Survey – ask
FORECASTING – process of predicting the the customer about purchasing
future event. plans
- Underlying basis of all business - What consumers say and what the
decisions (production, inventory, actually do are often different.
personnel, and facilities).
- 2. QUANTITATIVE METHODS
FORECASTING TIME HORIZONS - Used when situation is “stable” and
1. SHORT-RANGE FORECAST – up to 1 historical data exist
year, generally less than 3 months. - Involves mathematical techniques
- Purchasing, job scheduling, workforce 2.1 Naïve approach
levels, job assignments, production 2.2 Moving averages
levels. 2.3 Exponential
2. MEDIUM-RANCE FORECAST – 3 smoothing
months to 3 years 2.4 Trend projection
- Sales and production planning, 2.5 Linear regression
budgeting
3. LONG-RANGE FORECAST – 3+ years
- New product planning, facility location,
research and development
TYPES OF FORECASTS
1. ECONOMIC FORECASTS
2. TECHNOLOGICAL FORECASTS
3. DEMAND FORECASTS
*NOTE: As food manufacturing industry, in this
discussion, we will focus on #3.
SEVEN STEPS IN FORECASTING

1. Determine the use of the forecast
2. Select the items to be forecasted
3. Determine the time horizon of the
forecast
4. Select the forecasting model(s)
5. Gather the data
6. Make the forecast
7. Validate and implement results
FORECASTING APPROACHES
1. QUALIATIVE METHODS I. NAÏVE APPROACH
- Used when situation is vague and little - Assumes demand in next period is the
data exist. same as demand in most recent period.
- Involves intuition, experience Example: If January sales were 68, then
1.1 Jury of executive opinion – pool February sales will be 68
opinions of high-level experts, - Sometimes cost effective and efficient.
sometimes augment by statistical - Can be a good starting point.
models.
- Has a “group-thick” disadvantage. 2A. MOVING AVERAGE METHOD – MA is a
series of arithmetic means
1.2 Delphi method – panel of experts - Used if little or no trend
- Queried iteratively; continues until - Provides overall impression of data over time
consensus is reached.
1.3 Sales force composite – estimates

from individual salespersons are
3. EXPONENTIAL SMOOTHING
a. Form of weighted moving average
- Weights decline exponentially
- Most recent data weighted most
b. Requires smoothing constant (a)
- Ranges from 0 to 1
- Subjectively chosen; normally based on
past experiences with historical data.
c. Involves little record keeping of past
data
2B. WEIGHTED MOVING AVERAGE – use

when trend is present
- Older data usually less important
- Weights based on experience and
intuition
POTENTIAL PROBLEMS WITH MOVING

AVERAGE
 Increasing n smooths the forecast but
makes it less sensitive to changes
 Does not forecast trends well
 Require extensive historical data
COMMON MEASURES OF ERROR
4. TREND PROJECTIONS
- Fitting a trend line to historical data
points
- Linear trends can be found using the
least squares techniques
5. ASSOCIATIVE FORECASTING
- Used when changes in one or more
independent variables can be used to
predict the changes in the dependent
variable. MULTITPLE REGRESSION ANALYSIS
- Most common technique is linear
regression analysis.
CORRELATION – how strong is the linear

relationship between the variables?
- Coefficient of correlation, r, measures
degree of association
- Values range from -1 to +1
MODULE 5: PRODUCT, LAYOUT,
AND LOCATION STRATEGIES
DESIGNING YOU OPERATIONS: • Environment-friendly design
PRODUCTION, LAYOUT, AND LOCATION
STRATEGIES DEFINING A PRODUCT
- Once new goods/services are selected
PRODUCT AND PROCESS STRATEGY for introduction, they must be defined.
- The basis for an organization’s - Equipment and HR cannot be
existence is the good or service it determined until product is defined
provides. Therefore, the objective of the
Operations Manager is to develop and
implement a product strategy and build
a production process that meet the
demands of the market.
FOLLOW THE PARETO PRINCIPLE:
” focus on the critical
few, not the trivial
many”
The effective Operations Manager selects

items that show the greatest promise.
Techniques in product design

• Robust design - making the product or
process insensitive to variation
• Modular design - product is designed

in easily segmented components
• Computer-aided design - software is

used to create precision drawings or
technical illustrations
• Computer-aided manufacturing - an
application technology that uses
computer software and machinery to
facilitate and automate manufacturing
processes
• Virtual reality technology - images

substitute for the real thing but still allow
the user to respond interactively

4-AND-5

Uploaded by

Copyright:

Available Formats

4-AND-5

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

4-AND-5

Uploaded by

Copyright:

Available Formats

MODULE 4: FORECASTING reviewed for reasonableness, then

SEVEN STEPS IN FORECASTING

1.3 Sales force composite – estimates

2B. WEIGHTED MOVING AVERAGE – use

POTENTIAL PROBLEMS WITH MOVING

CORRELATION – how strong is the linear

The effective Operations Manager selects

Techniques in product design

• Modular design - product is designed

• Computer-aided design - software is

• Virtual reality technology - images

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.