Demand_Planning - Michigan State University, 2004- 1 -...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Michigan State University, 2004- 1 - Michigan State University, 2008- 1 - Demand Planning, Demand Planning, Forecasting, and Forecasting, and Management Management Michigan State University, 2004- 2 - Michigan State University, 2008- 2 - Key Terms Demand planning: a process whereby managers strive to build a match between the demands of customers and the productive capacity that the Operations Management system provides. Demand forecasting: a reactive approach in which managers predict demand and make production plans accordingly. Demand management: a proactive approach in which managers attempt to influence either the pattern or consistency of demand. Michigan State University, 2004- 3 - Michigan State University, 2008- 3 - Levels of Demand Planning Strategic level planning: generates long term forecasts of demand (more than one year into the future), that are used to make grand technology or facility plans. Tactical planning: generates forecasts of demand for product families or for particular geographic locations in order to facilitate intermediate (6 to 18 months) capacity and resource plans. Detailed operational forecasts: used to do short term (daily or weekly) product scheduling. Michigan State University, 2004- 4 - Michigan State University, 2008- 4 - Levels of Planning Time Horizon Demand planning units Uses of forecasts and demand management plans Types of decisions involved Strategic: 1-5 years Total dollar or unit sales for a business unit across the sales network- Supply chain network design- Capacity planning (investments or divestments)- Find new sources of supply- Build or sell a plant- Contract for transportation services- Open or close new service location Tactical: 6-18 months Total dollar or unit sales for a product family in a region- Sales and operational planning- Product portfolio planning- Aggregate production plans- Employee hiring and firing- Planned overtime work- Subcontracting- New product launches Operational (short): 1-12 weeks Dollar or unit sales for a given item at a given location- Inventory planning- Purchasing plans - Labor scheduling- Daily production schedule- Daily work schedule- Purchase orders Michigan State University, 2004- 5 - Michigan State University, 2008- 5 - Forecasting Different forecasts for different purposes Forecasting, while inherently flawed, is critical to...
View Full Document

Page1 / 26

Demand_Planning - Michigan State University, 2004- 1 -...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online