Exam 3 Outline SCM 303

Exam 3 Outline SCM 303 - Exam 3 Outline SCM 303 Chapter 12...

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Exam 3 Outline SCM 303 Chapter 12 Demand Planning: Forecasting and demand management\ Demand Planning- the combined process of forecasting and managing customer demands to create a planned pattern of demand that meets the firm’s operational and financial goals. Fluctuating customer demand cause operational inefficiencies, such as: Need for extra capacity resources, backlog, customer dissatisfaction, system buffering(safety stock, safety lead time, capacity cushions, etc.) 3 basics tactics to influence demand - influence the timing or quantity of demand through pricing changes or promotions. Managing the timing of order fulfillment. Encourage customers to shift their orders from one product to another, or from one service provider to another. Pg 358 for detailed. Improving planning management- improving info accuracy and timeliness, reducing lead time, redesigning the product: manufacturing postponement, logistics solutions - logistics (geographic) postponement, variable assignment. Collaborating and sharing information Demand forecasting- a decision process in which managers predict demand and make operational plans accordingly Demand management- a proactive approach in which managers attempt to influence either the pattern or consistency of demand. Stable Pattern- a consistent horizontal stream of demands Seasonality and cycles- regular demand patterns of repeating highs and lows. Trend- the general sloping tendency of demand, either upward or downward, in a linear or nonlinear fashion Shift or step change- a onetime change in demand, usually due to some external influence on demand. Autocorrelation- the correlation of current demand values with past demand values. Forecast error- the difference between a forecast and the actual demand. Forecast accuracy- measures how closely the forecast aligns with the observations over time. Every error, whether positive or negative, reduces forecast accuracy. Forecast bias- indicates the tendency of a forecasting technique to over or under predict Strategic level planning- generates long term forecasts of demand(more than one year into the future), that are used to make grand technology or facility plans Tactical planning- generates forecasts of demand for product families or for particular geographic locations in order to facilitate intermediate (6to 18months ) capacity and resource plans Detailed operational forecasts- used to do short term (daily or weekly ) product scheduling Forecasting- different forecasts for different purposes, forecasting, while inherently flawed, is critical to the success of every firm. Central Premise: for every event, there is some leading indicator, the trick is to find that indicator Designing a forecasting process- pg 347 Most common approaches to forecasting of qualitative judgement based forecasting Grassroots forecasting- a technique that seeks inputs from people who are in close contact with customers and products. Executive Judgement-
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Exam 3 Outline SCM 303 - Exam 3 Outline SCM 303 Chapter 12...

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