BU385 Chapter 3: Chapter 3- Demand Forecasting
Document Summary
Basic input of decision processes of operations management b/c they provide information on future demand. Primary goal of ops is to match supply to demand. Ops needs to know capacity needed to make staffing and equipment decisions, budgets must be prepared, purchasing needs information for ordering from suppliers, and supply chain partners to make plans. Demand forecast: estimate of expected demand during specified future period; helps ops managers reduce uncertainty enables them to make more meaningful plans. Demand forecasting for business involves modelling the past pattern of demand for an item and projecting it into future while taking new developments into account. 3 types of uses for demand forecasts in operations: System design: help managers design the system long-term plans about which g/s to offer, capacities, facilities, equipment, location, etc. System use: help them plan medium-term use of system planning overall inventory and workforce levels, and planning production at aggregate product family level.
