LAW 122 Lecture Notes - Lecture 2: Demand Forecasting, Causal System, Operations Management
31 Oct 2017
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Document Summary
Forecasts are a basic input in the decision process of operations management because they provide information on future demand. Goal of operations management is to match supply and demand. A demand forecast: is the estimate of expected demand during a specified future period. Take into account current factors and conditions and past experience in a similar situation to make forecasts. Demand forecasting models past pattern of demand for an item and projects it into the future while taking into account new developments. Long term plans about which goods and services to offer: capacities, facilities and equipment: help managers design the system, help them plan the medium term use of the system. Planning overall inventory and workforce levels and planning production at the aggregate product family level: schedule the short-term use of the system. Scheduling of production, purchasing parts and raw materials, staff scheduling. Forecasting horizon: is the range of time periods we are forecasting for.
