SCHM 2301 Chapter Notes - Chapter 12: Customer Satisfaction, Aggregate Demand, Average Absolute Deviation
22 Mar 2016
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Document Summary
The role that demand planning plays in operations. Predict too high of a demand and you lose money from: holding costs, lost wages paid to workers, lost capacity, disposal of inventory. Predict too low of demand: lost sales, lower product availability. Different based on size of operation and length of time: long-term supply chain design, intermediate sales and operations planning, short-term inventory and purchasing planning. Forecasting is a process that should be continually improved. Goal develop forecasts that are usable, timely, and accurate. Identify the users and decision making processes that the forecast will support. Time horizon: the forecasts should cover a usable time period. Level of detail: macro or micro factors. Accuracy versus cost: more accurate the higher the costs. Identify likely sources of the best data inputs. Select forecasting techniques that will transform data into timely accurate forecasts. Built upon the estimates and opinions of people most often experts who have related sales or operational experience.
