chapter 4 production

chapter 4 production - Chapter 4 Forecasting- The art and...

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Forecasting- The art and science of predicting future events. A forecast is usually classified buy the future time horizon that it covers. Time horizons fall into 3 categories: o Short range forecast- This forecast has a time span of up to 1 year but is generally less than 3 months. It is used for planning, purchasing, job scheduling, workforce levels, job assignments, and production levels. o Medium range forecast - A medium-range, or intermediate, forecast generally spans from 3 months to 3 years. It is useful in sales planning, production planning and budgeting, cash budgeting, and analyzing various operating plans. o Long range forecast - Generally 3 years or more in time span, long-range forecasts are used in planning for new products, capital expenditures, facility location or expansion, and research and development. Organizations use 3 major types of forecasts in planning future operations: o Economic forecasts- Planning indicators valuable in helping organizations prepare medium- to long-range forecasts. o Technical forecasts - Long-term forecast concerned with the rates of technological progress. o Demand forecasts - Projections of a company’s sales for each time period in the planning horizon. The impact of product forecast are the 3 following activities: o Human Resources- Hiring, training, and laying off workers all depend on anticipated demand. o
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This note was uploaded on 10/22/2008 for the course ECON 321 taught by Professor Sani during the Fall '08 term at Rutgers.

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chapter 4 production - Chapter 4 Forecasting- The art and...

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