BUS 346 Chapter Notes - Chapter 3: Time Series, Operations Management, Delphi Method
6 Sep 2017
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Forecasts reduce uncertainty; estimate about future val of variable (i. e. demand) Primary goal of operations = match supply and demand. Anticipated demand from either actual customer orders or forecasts. Expected level of demand; degree of accuracy assigned to forecast: expected lvl of demand = structural variation (trend, seasonal variation, forecast accuracy = ability to model demand, random var, unforeseen events. Basis for budgeting, planning capacity, sales, prod, etc. Yield management = percentage of capacity being used. Uses = plan syst, plan use of syst. Assumes that same underlying causal syst in past will continue to exist. Forecasts not perfect; randomness precludes perfect forecast. Forecasts for groups of items tend to be more accurate. Forecast accuracy decr as time pd covered by forecast (time horizon) incr: flexible business require shorter forecasting horizon short-range more accurate forecasts. Reduce by collaborative planning w/ supply chain partners, info sharing among partners, rapid comm about poor forecasts.
