BU435 Chapter Notes - Chapter 7: Forecast Error, Bullwhip, Lead Time
Document Summary
Chapter 7: demand forecasting in a supply chain. 7. 1 the role of forecasting in a supply chain. Push processes: mngr must plan lvl of activity, be it production, transportation or any other planned activity. Pull processes: mngr must plan lvl of available capacity/inventory, but no actual amount to be executed. 7. 3 components of a forecast and forecasting methods. Company must be knowledgeable about # of factors that"re related to demand forecast, including: past demand, lead time of product replenishment, planed advertising/marketing efforts, planned price discounts, state of the economy, actions that competitors have taken. Equations for calculating systematic component: multiplicative: s = level x trend x seasonal factor, additive: s = level + trend + seasonal factor, mixed: s = (level + trend) x seasonal factor. In static forecasting method, forecast in period t for demand in period t+ l is a product of the level in.
