Class 10 (1) - AGENDA TEST RESULTS CHAPT 4 FORECASTING GO...

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AGENDA TEST RESULTS CHAPT. 4 FORECASTING GO OVER EXAM
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What is Forecasting? Process of predicting a future event Underlying basis of all business decisions Production Inventory Personnel Facilities ??
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Short-range forecast Up to 1 year, generally less than 3 months Purchasing, job scheduling, workforce levels, job assignments, production levels Medium-range forecast 3 months to 3 years Sales and production planning, budgeting Long-range forecast 3 + years New product planning, facility location, research and development Forecasting Time Horizons
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Distinguishing Differences Medium/long range forecasts deal with more comprehensive issues and support management decisions regarding planning and products, plants and processes Short-term forecasting usually employs different methodologies than longer-term forecasting Short-term forecasts tend to be more accurate than longer-term forecasts
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Types of Forecasts Economic forecasts Address business cycle – inflation rate, money supply, housing starts, etc. Technological forecasts Predict rate of technological progress Impacts development of new products Demand forecasts Predict sales of existing products and services
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Strategic Importance of Forecasting Human Resources – Hiring, training, Human Resources – Hiring, training, laying off workers laying off workers Capacity – Capacity shortages can Capacity – Capacity shortages can result in undependable delivery, loss result in undependable delivery, loss of customers, loss of market share of customers, loss of market share Supply Chain Management – Good Supply Chain Management – Good supplier relations and price supplier relations and price advantages advantages
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Seven Steps in Forecasting Determine the use of the forecast Select the items to be forecasted Determine the time horizon of the forecast Select the forecasting model(s) Gather the data Make the forecast Validate and implement results
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The Realities! Forecasts are seldom perfect
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This note was uploaded on 10/30/2011 for the course BUS 451 taught by Professor Bilbrey during the Spring '11 term at Anderson University SC.

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Class 10 (1) - AGENDA TEST RESULTS CHAPT 4 FORECASTING GO...

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