COMM 225 Lecture Notes - Lecture 3: Moving Average, Exponential Smoothing, Weighted Arithmetic Mean
Document Summary
Demand forecast; the estimate of the expected demand for a specified future period, need 2 information which are current factors or conditions and past experience in similar situation. 3 types of use for demand forecast to predict variables such as profit, revenues, costs ; Help management design the system,(long-term plans like inventory & workforce) Schedule the short-term use (scheduling of production, purchase of parts) Collaborative planning, forecasting and replenishment ( cpfr); supply chain partners collaborate on forecasting (both sides providing inputs) Features common to all forecasts: system that has existed in the past will continue to exist in the future. Forecasting horizon; the range of time periods we are forecasting for. Flexible organizations that respond quickly to change in demand have a competitive advantage because they require a shorter forecasting horizon and benefit from more accurate short term forecasts. Achieve flexibility by shortening the lead time and purchase raw material.
