OM-Module-9.pptx - Operations Management By Tauseef Iqbal Khan Faculty Member \u2013 IQRA University Outline Of The Module \u2022 Heizer J and

OM-Module-9.pptx - Operations Management By Tauseef Iqbal...

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Operations Management By Tauseef Iqbal Khan Faculty Member – IQRA University
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Outline Of The Module Heizer, J. and Render (Chapter -4) Wisner, J. D., Leong, G. K. and Tan, KC., Principles of Supply Chain Management (Chapter 5)
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Forecasting - Time Horizons Forecasting is the art and science of predicting future events. Forecasting may involve taking historical data (such as past sales) and projecting them into the future with a mathematical model Forecast is usually classified by the future time horizon that it covers. Time horizons fall into three categories 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. 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 analysis of various operating plans 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.
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Types Of Forecast Economic forecasts Planning indicators that are valuable in helping organizations prepare medium- to long-range forecasts Technological forecasts Long-term forecasts concerned with the rates of technological progress Demand forecasts Projections of a company’s sales for each time period in the planning horizon
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Forecasting Techniques - Qualitative Methods Qualitative forecasting methods are based on intuition or judgmental evaluation and are generally used when data are limited, unavailable, or not currently relevant This approach can be very low cost, its effectiveness depends to a large extent on the skill and experience of the forecaster Jury of Executive Opinion A group of senior management executives who are knowledgeable about the market, their competitors and the business environment collectively develop the forecast The challenge is if one member’s views dominate the discussion This technique is applicable for long-range planning and new product introductions
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Forecasting Techniques -
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