11 views

Uploaded by Anonymous XybLZf

Operations research

- kotler ppt 151-200
- Sales Forecasting Methods
- 04 Forecasting
- APO Demand Planner
- Adding New Key Figure to Planning Book
- Forecasting
- Heizer Om11 Irm Ch04
- _FinMan Session 2 - Forecasting
- Hoang_-_Time_Series_Forecasting.docx
- Quantitative Models (2)
- AMF 103 Managerial Economics Book
- tesi
- Time Series Analysis
- Volatility
- Forecasting Methods White Paper
- Forecasting
- Demand
- Forecasting
- إدارة عمليات انتاجية
- ahmed1

You are on page 1of 33

Develop budgets, hiring plans, etc.

Plan production or order materials

Get agreement within firm and

across supply chain partners

Types of Forecasts

Demand

Firm-level

Market-level

Supply

Materials

Labor supply

Price

Cost of supplies and services

Cost of money interest rates, currency

rates

Market price for firms product or service

Forecast Laws

amount

periods

No substitute for calculated values.

Forecasting Approaches

Qualitative Methods

Quantitative Methods

vague and little data

exists

stable and historical

data exists

New products

New technology

Involves intuition,

experience

************************

*****

E.g., forecasting sales

to a new market

Existing products

Current technology

Heavy use of

mathematical

techniques

**************************

*****

E.g., forecasting sales of

a mature product

Qualitative Forecasting

Executive opinions

Sales force composite

Consumer surveys

Outside opinions

Delphi method

Life cycle analogy*

Demand Forecasting

Uses historical data

Basic time series models

Linear regression

For time series or causal

modeling

Period

1

2

3

4

5

6

7

8

Demand

12

15

11

9

10

8

14

12

What assumptions

must we make to

use this data to

forecast?

Demand . . .

Demand

. . . randomness

Time

Demand

Time

Demand

May

May

May

May

Models

Distinguish between random

fluctuations and true changes

in underlying demand

patterns.

Averaging Methods

generates a forecast for a particular

time period by averaging the

observed data values(that is the

actual values of the dependent

variable) for the most recent n time

periods.

Two versions of this method are:

simple moving averages and

weighted moving averages.

Model

Moving Average Model A time

series forecasting model that derives

a forecast by taking an average of

recent demand value.

Smoothes out random fluctuations

n

of

Dt 1i

data

Ft 1 i 1

n

Best for short term forecasts

in the

absence of seasonal or cyclical

variations

Models

Period

1

2

3

4

5

6

7

8

Demand

12

15

11

9

10

8

14

12

Ft 1

Dt 1i

i 1

forecast for Period 8:

=

=

(14 + 8 + 10) / 3

10.67

Weighted Moving Average Model A

form of the moving average model

that allows the actual weights

applied to past observations to differ.

Weights are used to vary the effect of

past data, based on the fact that

more recent data is more important,

the weights should go up and always

n

Wt 1i Dt 1i

Ft 1 i 1

Wt 1i

i 1

=

[(0.5 14) + (0.3 8) + (0.2 10)] / (0.5 + 0.3 + 0.2)

=

11.4

What are the advantages?

What do the weights add up to?

Could we use different weights?

Compare with a simple 3-period moving average.

Demand Values . . .

Period

Actual

Demand

Two-Period

Moving

Average

Forecast

Three-Period Weighted

Moving Average

Forecast Weights = 0.5,

0.3, 0.2

12

15

11

13.5

13

12.4

10

10

10.8

9.5

9.9

14

8.8

12

11

11.4

13

11.8

Exponential Smoothing

Sophisticated weight averaging model

In fact, exponential smoothing is a short

name for an exponentially weighted

moving average that require only three

pieces of data:

Ft = Forecast for the current period t

Dt = Actual demand for the current period t

= Weight between 0 and 1 (smoothing constant)

Simple Exponential

Smoothing

Formula

Ft+1

+ (1

= Ft + (Dt Ft) = Dt

Ft

What happens as gets closer to 0 or 1?

Where does the very first forecast come from?

Exponential Smoothing

Forecast with = 0.3

Period

Actual

Demand

Exponential

Smoothing

Forecast

12

11.00

15

11.30

11

12.41

11.99

10

11.09

10.76

14

9.93

12

11.15

11.41

F2 = 0.312 + 0.711

= 3.6 + 7.7

= 11.3

F3 = 0.315 + 0.711.3

= 12.41

Resulting Graph

Trends

moving average or exponential

smoothing model when there is a

trend in the data?

Model as Before:

Period

Actual

Demand

Exponential

Smoothing

Forecast

11

11.00

12

11.00

13

11.30

14

11.81

15

12.47

16

13.23

17

14.06

18

14.94

15.86

is based on

historical demand,

it always lags

the obvious

upward trend

for Trend

Add trend factor and adjust using exponential

smoothing

Needs only two more numbers:

Tt = Trend factor for the current period t

= Weight between 0 and 1

Then: Tt+1 = (Ft+1 Ft) + (1 ) Tt

And the Ft+1 adjusted for trend is = Ft+1 + Tt+1

Measuring Forecast

Accuracy

How do we know:

If a forecast model is best?

If a forecast model is still working?

What types of errors a particular

forecasting model is prone to make?

Need measures of forecast accuracy

Measures of Forecast

Accuracy

Error = Actual demand Forecast

or

Et = Dt Ft

For n time periods where we have

actual demand and forecast values:

MFE

Ei

i 1

(MAD)

For n time periods where we have

actual demand and forecast values:

MAD

Ei

i 1

Example

Period Demand Forecast

3

4

5

6

7

8

11

9

10

8

14

12

13.5

13

10

9.5

9

11

Error

-2.5

-4.0

0

-1.5

5.0

1.0

Absolute

Error

2.5

4.0

0.0

1.5

5.0

1.0

A Dartboard Analogy

The forecast errors

are small and unbiased

An Analogy (continued)

Low MFE, but high

MAD:

On average, the

darts hit the

bulls eye (so much

for averages!)

An Analogy (concluded)

The forecasts

are inaccurate and

biased

- kotler ppt 151-200Uploaded byGitanjali Bagga
- Sales Forecasting MethodsUploaded byPradeep Nityanand Puri
- 04 ForecastingUploaded byDanielle Ersando
- APO Demand PlannerUploaded byMurali
- Adding New Key Figure to Planning BookUploaded byavsomshetti
- ForecastingUploaded byHina Sikander
- Heizer Om11 Irm Ch04Uploaded byDHRUV SONAGARA
- _FinMan Session 2 - ForecastingUploaded byian92193
- Hoang_-_Time_Series_Forecasting.docxUploaded bybackbeat_2006
- Quantitative Models (2)Uploaded byCeazar Justine Fulugan
- AMF 103 Managerial Economics BookUploaded bykeenodiid
- tesiUploaded byAlessandro Festante
- Time Series AnalysisUploaded byrahul
- VolatilityUploaded byAbdur Rehman
- Forecasting Methods White PaperUploaded byBalaji Ramakrishnan
- ForecastingUploaded bydtvishal
- DemandUploaded byToulouse18
- ForecastingUploaded byAnurag Sharma
- إدارة عمليات انتاجيةUploaded byZakiah Abu Kasim
- ahmed1Uploaded byحماد حسين
- Unit 2sales ManagementUploaded byamansrivastava007
- Chapter 8Uploaded byWayne Teo
- 3. Forecasting.pdfUploaded byrohan rathod
- ForecastUploaded byDominic Andoh
- Demand PlanningUploaded byManjiree Ingole Joshi
- Chapter 14Uploaded bytami
- Market and Demand AnalysisUploaded bysimmi33
- Management NotesUploaded byitzharry
- ForecastingUploaded byD.j. Miller
- Improve the Accuracy of Short Term Forecasting (2)Uploaded byNiraj Kumar

- Business administrationUploaded byAnonymous XybLZf
- odt (5)Uploaded byAnonymous XybLZf
- SMEDUploaded byAnonymous XybLZf
- Exam Paper Ecos EditedUploaded byAnonymous XybLZf
- Inclass 2017Uploaded byAnonymous XybLZf
- Hit 400 Project PresentationUploaded byAnonymous XybLZf
- Tec Assignment 1 h1314161rUploaded byAnonymous XybLZf
- Lerning Journal Unit 7Uploaded byAnonymous XybLZf
- CAD CAM 2 Group AssignmentUploaded byAnonymous XybLZf
- Unit 3 DiscussionUploaded byAnonymous XybLZf
- Unit 3 AssignmentUploaded byAnonymous XybLZf
- An Overview of Cnc MachinesUploaded byRajendra Kumar Yadav
- Programming Assignment 3Uploaded byAnonymous XybLZf
- T_area OutputUploaded byAnonymous XybLZf
- Pseudo Code for Bool.pyUploaded byAnonymous XybLZf
- tryme3.txtUploaded byAnonymous XybLZf
- UNIT 1 DISCUSION.docxUploaded byAnonymous XybLZf
- Unit 4 DiscussionUploaded byAnonymous XybLZf
- Unit 5 DiscussionUploaded byAnonymous XybLZf
- Unit 6 DiscusionUploaded byAnonymous XybLZf
- Unit 1 DiscusionUploaded byAnonymous XybLZf
- Chapter 3Uploaded byAnonymous XybLZf
- EIM 413_ Test12 1Uploaded byAnonymous XybLZf
- EIM 413_ Test 11Uploaded byAnonymous XybLZf
- Assignment One (Metal Forming Processes)Uploaded byAnonymous XybLZf
- Tec AssignmentUploaded byAnonymous XybLZf
- Question 1Uploaded byAnonymous XybLZf
- Manufacturing Systems Assignment 2Uploaded byAnonymous XybLZf

- laporan produktivitas alat beratUploaded bymahendra
- SS Template 2-AdvancedUploaded bySaeed Ayeen
- Design ConsiderationsUploaded byimran
- qfdUploaded byAnush Jk
- Guidelines for Car Parking and Internal Traffic Circ 2014Uploaded byLim Han Jian
- rdt list 2008Uploaded bydentropolis
- DE1 SoC ComputerUploaded bycointoin
- Real-Time Monte Carlo Tree Search in Ms Pac-ManUploaded byKidfi Syair
- Using the Sterling RCP Extensibility ToolUploaded byRachapudi Suman
- Structural Design of G+5 Building (Final Year Project for BSC in Civil Engineering)Uploaded bySamuel Tesfaye
- TheoryUploaded byNikhilPrakash
- CV Template - Table FormatUploaded byVertex42 LLC
- Weller, Alan_ Joannides, Frixos-Structural Steel Design to BS 5950, Part 1-ASCE Press, Thomas Telford (2002)Uploaded byahmedany
- create your own school project instructions rubricUploaded byapi-305277490
- Learning Curve PPTUploaded byVinam Tyagi
- 9 Learning StrategiesUploaded bymemetic_2010
- SDT ConceptsUploaded byManasvi Saxena
- Sakri ReportUploaded byNikhil Dixit
- Hilti Mechanical Anchoring Systems 624079Uploaded byStefano de Alberti
- configuratie laptopUploaded byAlex Grigoras
- Paert CatalogueUploaded byDaria Kononova
- Chap 1(a)-Molecular Diffusion in Gases.pptUploaded byHelena Francis
- SOA-and-Web-Services-SecurityUploaded byarteepu37022
- Aluminum Extrusion TechnologyUploaded byGokhan Celikdag
- raqEnroll.docxUploaded byEmmanuel Lacsamana Bobis
- Contingency analysis of Power Systems.pdfUploaded bybenitogaldos19gmail.com
- Crown PH-1A AC-Battery Power SupplyUploaded byRickPrice
- Tugas 1 Eksperimental - Muhammad Aprilia Devino (25017063)Uploaded bySoroga Ichimonji Ryu
- Agitator Mixer ComparisonUploaded byimrancenakk
- 371439 cUploaded bypriyosantosa