Delphi method Managers and staff complete a series of questionnaires each

Delphi method managers and staff complete a series of

This preview shows page 35 - 38 out of 221 pages.

Delphi method: Managers and staff complete a series of questionnaires, each developed from the previous one, to achieve a consensus forecast. Commonly used for Technological forecasting, when to introduce a new technology. It’s a long term one time activity and has the same issues like expert opinion type of judgmental forecast. Time Series Analysis Time series forecasting models try to predict the future based on past data We as Managers can pick models based on: 1. Time horizon to forecast 2. Data availability 3. Accuracy required 4. Size of forecasting budget 5. Availability of qualified personnel
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Production and Operations Management –MGT613 VU © Copyright Virtual University of Pakistan 36 Naïve Forecasts Simple to use Virtually no cost Quick and easy to prepare Data analysis is nonexistent Easily understandable Drawbacks Cannot provide high accuracy Can be a standard for accuracy
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Production and Operations Management –MGT613 VU © Copyright Virtual University of Pakistan 37 Lesson 09 Time Series Forecasts Trend - long-term upward or downward movement in data often relates to population shifts, changing incomes, and cultural changes. Seasonality - short-term fairly regular variations in data related to factors like weather, festive holidays and vacations. Mostly experienced by supermarkets, restaurants, theatres, theme parks. Cycle – wavelike variations of more than one year’s duration these occurs because of political, economic and even agricultural conditions Irregular variations - caused by unusual circumstances such as severe weathers, earthquakes, worker strikes, or major change in product or service. They do not capture or reflect the true behavior of a variable and can distort the overall picture. These should be identified and removed from the data. Random variations - caused by chance and are in reality are the residual variations that remain after the other behaviors have been identified and accounted for. Forecast Variations Techniques for Averaging Moving average Weighted moving average Exponential smoothing Moving average – A technique that averages a number of recent actual values, updated as new values become available. Weighted moving average – More recent values in a series are given more weight in computing the forecast. Simple Moving Average Formula The simple moving average model assumes an average is a good estimator of future behavior The formula for the simple moving average is: F t = Forecast for the coming period N = Number of periods to be averaged A t-1 = Actual occurrence in the past period for up to “n” periods Simple Moving Average Problem (1) Question: What are the 3-week and 6-week moving average forecasts for demand?
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