Forecasting_WEB

Forecasting_WEB - Özgür Özlük DS 412 Forecasting DS 412...

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Unformatted text preview: Özgür Özlük DS 412 Forecasting DS 412 OPERATIONS MANAGEMENT FORECASTING Özgür Özlük DS 412 Forecasting What is Forecasting? “I think there is a world market for maybe five computers” Thomas Watson chairman of IBM 1943 Özgür Özlük DS 412 Forecasting What is Forecasting? The art and science of predicting future events Accounting : Profit projections Finance : Equipment needs HR : Recruitment needs Marketing : Pricing and promotions Operations : Inventory planning Özgür Özlük DS 412 Forecasting Features of Forecasting Assume the underlying causal system from the past will remain the same in future Rarely perfect Aggregation yields better results The longer the time horizon, the less reliable the forecast accuracy is Özgür Özlük DS 412 Forecasting Steps in Forecasting Determine the purpose Establish time horizon Select a forecasting technique Gather and analyze data Prepare the forecast Monitor the forecast Özgür Özlük DS 412 Forecasting Forecasting Methods Qualitative Methods Quantitative Methods Based on human judgment, opinions, subjective and nonmathematical Based on mathematics; quantitative in nature Can incorporate latest changes in the environment and “inside information” Consistent and objective; able to consider loads of data Can bias the forecast and reduce accuracy Often quantifiable data is not available. Only as good as the data used. Özgür Özlük DS 412 Forecasting Qualitative Forecasting Executive Opinion: A group of managers meet and come up with a forecast Market Research: Uses surveys and interviews to identify customer preferences Delphi method: Seeks to develop a consensus among a group of experts Özgür Özlük DS 412 Forecasting...
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This note was uploaded on 09/13/2011 for the course DS 412 taught by Professor Eng during the Spring '07 term at S.F. State.

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Forecasting_WEB - Özgür Özlük DS 412 Forecasting DS 412...

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