CH. 6 - Forecasting

CH. 6 - Forecasting - DEMAND FORECASTING Why Forecast?-...

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Unformatted text preview: DEMAND FORECASTING Why Forecast?- long range planning- budgetary planning and control- plan new products- planning of capacity, production, scheduling and inventory Sources of Information- free info.- financial newspapers- StatsCan, Ag Can-consumer opinion - questionnaires- distribution surveys- retail outlets- sales force- executive opinion- marketing trials and market research- historical data Types of Forecasting- qualitative- time-series- causal- simulation Components of Demand Observed demand has 6 components- average - trend- seasonal- cyclic - difficult because of unknown time-span and cause- random - residual variation- autocorrelation - related to past TIME SERIES ANALYSIS- predict future based on past- thus, need data- each technique has pros and cons SIMPLE MOVING AVERAGE (MA)- Centred or Forward End- choice of period for averaging - longer - more smoothing, lags trend- shorter - closer to trend, more oscillations- choose odd no. of periods - allows centring of average on a period (ie 3, 5, 7, 9....)- choose odd no....
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This note was uploaded on 01/18/2012 for the course IND/MECH mec 713 taught by Professor Bhole during the Fall '11 term at Ryerson.

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CH. 6 - Forecasting - DEMAND FORECASTING Why Forecast?-...

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