33:799:301 Lecture Notes - Lecture 4: Time Series, Business Cycle, Dependent And Independent Variables

• School: Rutgers University
• Department: Supply Chain Management
• Course: 33:799:301
• Professor: A Taitt

Document Summary

Forecasting and demand planning are key building blocks from which all supply chain planning activities are derived. Step 1: forecasting : where the forecast is developed through data analysis and judgement. Independent demand unrelated to the demand of other items. Dependent demand directly related to other product demands (forecasted) (demand is calculated) Results may be inaccurate but still creates a baseline. Critical to downstream supply chain planning decisions. Good forecasting can benefit a company and create more affected planning. Bad forecasting if the forecasting is bad everything else in planning will be bad. Forecasting is more accurate if its closer to the day that is forecasted. Goal: to minimize forecasting error while taking into account factors that influence demand like market changes, seasonally, competitive activity, etc. Qualitative based on opinion and intuition. Used when data is limited, unavailable, and not relevant. Personal insight based on the insight of the most experience person. It"s fast and cheap but it is unreliable.