OM 300 Lecture Notes - Lecture 4: Moving Average, Exponential Smoothing, Delphi Method
9 May 2017
School
Department
Course
Professor
Document Summary
What is forecasting: process of predicting a future event, underlying basis of all business decisions. Up to 1 year, generally less than 3 months. Purchasing, job scheduling, workforce levels, job assignments, production levels: medium-range forecast. Sales and production planning, budgeting: long-range forecast. New product planning, facility location, research and development. Introduction growth maturity decline: as a product passes through life cycle, forecasts are useful in projecting. Introduction and growth require longer forecasts than maturity and decline. Address business cycle inflation rate, money supply, housing starts, etc: technological forecasts. Impacts development of new products: demand forecasts. Predict sales of existing products and services. Strategic importance of forecasting: human resources hiring, training, laying off workers, capacity capacity shortages can result in undependable delivery, loss of, supply chain management good supplier relations and price advantages. The realities: forecasts are seldom perfect, most techniques assume an underlying stability in the system, product family and aggregated forecasts are more accurate than individual product forecasts.
