361 Chap 10 Slides Forecasting

361 Chap 10 Slides Forecasting - 1. Predicting future...

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1. Predicting future events. 2. Usually demand behavior over a time frame. 3. Qualitative methods. Based on subjective methods. 1. Quantitative methods. Based on mathematical formulas.
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1. Focus on supply chain management. Short term role of product demand. Long term role of new products, processes, and technologies. 1. Focus on Total Quality Management. Satisfy customer demand. Uninterrupted product flow with no defective items. 1. Necessary for strategic planning.
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1. Time Frame Short-range, medium-range, long-range 1. Demand Behavior Trends, cycles, seasonal patterns, random
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1. Short-range to medium-range Daily, weekly monthly forecasts of sales data Up to 2 years into the future 1. Long-range Strategic planning of goals, products, markets Planning beyond 2 years into the future
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1. Trend. Gradual, long-term up or down movement. 1. Cycle. Up & down movement repeating over long time frame. 1. Seasonal pattern. Periodic oscillation in demand which repeats. 1. Random movements follow no pattern.
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Time (a) Trend Time (d) Trend with seasonal pattern Time (c) Seasonal pattern Time (b) Cycle Demand Random Random movement movement
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1. Time series Regression or causal modeling. 1. Qualitative methods Management judgment, expertise, opinion. Use management, marketing, purchasing, engineering. 1. Delphi method Solicit forecasts from experts.
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6. Check forecast accuracy with one or more measures 4. Select a forecast model that seems appropriate for data 5. Develop/compute forecast for period of historical data 8a. Forecast over planning horizon 9. Adjust forecast based on additional qualitative information and insight 10. Monitor results and measure forecast accuracy 8b. Select new forecast model or adjust parameters of existing model 7. Is accuracy of forecast acceptable? 1. Identify the purpose of forecast 3. Plot data and identify patterns 2. Collect historical data
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Almost always wrong by some amount.
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This note was uploaded on 03/06/2012 for the course BUS M 361 taught by Professor Cynthiawallin during the Fall '10 term at BYU.

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361 Chap 10 Slides Forecasting - 1. Predicting future...

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