In this chapter you should be able to: Explain the strategic importance of process selection and the influence it has on the organization and its supply chain, name the two main factors that influence process selection, compare the four basic processing types,. | Chapter 8 - Forecasting Operations Management 6th Edition R. Dan Reid & Nada R. Sanders Copyright © 2016 John Wiley & Sons, Inc. Learning Objectives Identify principles of forecasting. Explain the steps involved in the forecasting process. Identify types of forecasting methods and their characteristics. Describe time series models. Learning Objectives - cont'd Describe causal modeling using linear regression. Compute forecast accuracy. Explain the factors that should be considered when selecting a forecasting model. Explain the nine-step process of CPFR. Forecasting - Defined Predicting future events One of the most important business functions as decisions are based on a forecast of the future Goal: Generate good forecasts on the average over time and keep errors low Forecasting is an ongoing process Principles of Forecasting Many types of forecasting models differ in complexity and amount of data & way they generate forecasts. Common features include: | Chapter 8 - Forecasting Operations Management 6th Edition R. Dan Reid & Nada R. Sanders Copyright © 2016 John Wiley & Sons, Inc. Learning Objectives Identify principles of forecasting. Explain the steps involved in the forecasting process. Identify types of forecasting methods and their characteristics. Describe time series models. Learning Objectives - cont'd Describe causal modeling using linear regression. Compute forecast accuracy. Explain the factors that should be considered when selecting a forecasting model. Explain the nine-step process of CPFR. Forecasting - Defined Predicting future events One of the most important business functions as decisions are based on a forecast of the future Goal: Generate good forecasts on the average over time and keep errors low Forecasting is an ongoing process Principles of Forecasting Many types of forecasting models differ in complexity and amount of data & way they generate forecasts. Common features include: Forecasts are rarely perfect Forecasts are more accurate for grouped data than for individual items Forecast are more accurate for shorter than longer time periods Steps in the Forecasting Process Decide what needs to be forecast Level of detail, units of analysis & time horizon required Evaluate and analyze appropriate data Identify needed data & whether it’s available Select and test the forecasting model Cost, ease of use & accuracy Generate the forecast Monitor forecast accuracy over time Types of Forecasting Methods – cont’d Classified into two groups: Types of Forecasting Models Qualitative methods – judgmental methods Forecasts generated subjectively by the forecaster Educated guesses Quantitative methods – based on mathematical modeling: Forecasts generated through mathematical modeling Qualitative Methods Quantitative Methods Time Series Models: Assumes information needed to generate a forecast is contained in a time series of data .
