Nissan
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Forecasting-єЬProcess of predicting a future event
єЬShort-range forecast
ÐŽVUp to 1 year; usually less than 3 months
ÐŽVJob scheduling, worker assignments
єЬMedium-range forecast
ÐŽV3 months to 3 years
ÐŽVSales & production planning, budgeting
єЬLong-range forecast
ÐŽV3+ years
ÐŽVNew product planning, facility location
єЬMedium/long range forecasts deal with more comprehensive issues and support management decisions regarding planning and products, plants and processes.
єЬShort-term forecasting usually employs different methodologies than longer-term forecasting
єЬShort-term forecasts tend to be more accurate than longer-term forecasts.
єЬEconomic forecasts
ÐŽVAddress business cycle, e.g., inflation rate, money supply etc.
єЬTechnological forecasts
ÐŽVPredict rate of technological progress
ÐŽVPredict acceptance of new product
єЬDemand forecasts
ÐŽVPredict sales of existing product
єЬHuman resources ЎV hiring, laying off, and training of workers depend on forecasting.
єЬCapacity ЎV when capacity is inadequate, the resulting shortages can mean undependable delivery, loss of customer, and market share.
єЬSupply-Chain Management ЎV good supplier relations and the ensuring price advantages for materials and parts depend on accurate forecasting
7 STEPS of forecasting.
єЬDetermine the use of the forecast
єЬSelect the items to be forecasted
єЬDetermine the time horizon of the forecast
єЬSelect the forecasting model(s)
єЬGather the data
єЬMake the forecast
єЬValidate and implement results
Qualitative Methods:
єЬUsed when situation is vague & little data exist
ÐŽVNew products
ЎVNew technologyєЬInvolves intuition, experience
Quantitative Methods:
єЬUsed when situation is ÐŽÒstableÐŽ¦ & historical data exist
ÐŽVExisting products
ÐŽVCurrent technology