Comprehensive Section

Comprehensive Section - Comprehensive Section Forecasting:...

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Comprehensive Section Forecasting: What techniques do we use to develop usable forecast in an uncertain world? A forecast is a statement about the future value of a variable of interest. Elements of a good forecast include timely, accurate, reliable, meaningful in units, in writing, simple to understand, and cost effective. The steps in the forecasting process include determine the purpose of the forecast, establish a time horizon, select a forecasting technique, obtain/clean/analyze appropriate data, make the forecast, and monitor the forecast. We can use qualitative forecasting, which permits the inclusion of soft information such as human factors, personal opinions, and hunches. These factors are difficult to quantify. Although they cannot be measured, that doesn’t mean they are less useful. Techniques include time series forecasting, various kinds of expert opinions, focus groups, and Adelphi model. Quantitative forecasting involves either the projection of historical data or the development of associative methods that attempt to use causal variables to make a forecast. These techniques rely on hard data. There are averaging techniques, which smoothes fluctuations in a time series, trend and seasonal techniques, Trend: Analysis of trend involves developing an equation that will suitably describe trend (assuming that trend is present in the data.) Seasonal: Regularly repeating upward or downward movements in series values that can be tied to recurring events. It may refer to regular annual variations. There is also Regression, which is a technique used for fitting a line to a set of points. What concerns do we need to address in assessing the utility of a forecast? We need to address the accuracy and control of forecasts. These are very vital, so forecasters want to minimize forecast errors. . In order to measure forecast accuracy and control, we can use mean average deviation, mean squared error, and mean average percentage error. Cost and accuracy are also major factors. Other factors to include are the availability of historical data, the availability of computer software, and the time needed to gather and analyze data to prepare the forecast. System Design We discussed the importance of designing product/service, capacity, process, and work systems. How do these interrelate and what is their relative importance? The importance of work system design is underscored by an organization’s dependence on human efforts to accomplish its goals.
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Work design is one of the oldest aspects of operations management. In the past, it has often been de-emphasized in operations management courses in favor of other topics. It is now an important key to productivity improvements and to continuous improvement. Specialization refers to work that concentrates on some aspect of a
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This note was uploaded on 09/02/2011 for the course MGT 3305 taught by Professor Reed during the Spring '08 term at Baylor.

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Comprehensive Section - Comprehensive Section Forecasting:...

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