GMS 701 Lecture 8: GMS 701- Week 8
19 Dec 2017
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Document Summary
Forecasts: purchase decisions made a long time before actual requirements are known, rely on forecasts of future demand, lead times, prices, and other costs, forecasts are rarely, if ever, perfect. Costs: costs associated with placing orders, holding inventory, running out of materials, and having a service unavailable when needed. Availability: desired quantities may be unavailable without paying a higher price or delivery charge. Price-volume relationship: reduced prices for larger quantities versus carrying costs. Reduce process setup and cycle time: reduce costs, get to market faster. Coordinate the flow of resources: eliminate process/system waste, ensure on-time or just-in-time arrival in economically sized batches. Use past data to predict the future: casual models. Identify leading indicators: develop linear or multiple regression models, time series forecasting, assumes sales follow a repetitive pattern over time. Gather opinions and use with judgement to forecast: market forecasts: estimates of sales staff, top down forecast, the delphi technique: a formal approach.
