MGT 3200 Lecture Notes - Lecture 3: Exponential Smoothing, Moving Average, Seasonality
Document Summary
Forecasts: basic input in the decision process of operations management because they provide information on future demand. Primary goal of operations: match supply to demand. Anticipated demand is derived from customer orders and forecasting. In addition to expected level of demand, the degree of accuracy for the forecast in important. Long-term: strategic planning tool, such as information about new products, new equipment, etc. Plan the system (usage for forecasting): long-range plans about the types of products and services to offer, what facilities and equipment to have, where to locate, etc. Plan the use of the system (usage for forecasting): short-range and intermediate-range planning, involving inventory and workforce levels, purchasing, budgeting, production, and scheduling. Assume that the same system that existed in the past will exist in the future. Forecasts are not perfect and actual amounts usually differ, allowances should be made for errors.
