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Chapter 3: Forecasting: Learning Insight

Operations management requires planning, implementing, and overseeing manufacturing to meet demand. Forecasting helps by ensuring adequate resources. Managers in the Philippines use qualitative and quantitative forecasting methods to develop production strategies tailored to their industry and goals. Forecasts estimate possible outcomes but are not always accurate, so managers must use caution. Good forecasting allows decisions based on expected events and helps operations managers maintain adequate workforce and capacity levels to meet fluctuating demand while avoiding excess costs.

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Joey Rosales
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67 views3 pages

Chapter 3: Forecasting: Learning Insight

Operations management requires planning, implementing, and overseeing manufacturing to meet demand. Forecasting helps by ensuring adequate resources. Managers in the Philippines use qualitative and quantitative forecasting methods to develop production strategies tailored to their industry and goals. Forecasts estimate possible outcomes but are not always accurate, so managers must use caution. Good forecasting allows decisions based on expected events and helps operations managers maintain adequate workforce and capacity levels to meet fluctuating demand while avoiding excess costs.

Uploaded by

Joey Rosales
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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CHAPTER 3: FORECASTING

Learning Insight

Operations management is quiet deep and intricate: You have to plan, implement, and supervise

the manufacturing of products and services. But forecasting can help smooth out the process by

ensuring adequate resources to meet demand. Here in the Philippines, companies use forecasting

methods to predict business outcomes. The discussion about forecasting made the class realize

that forecasts create estimates that can help managers develop and implement production

strategies and that the method of forecasting will vary according to available data and industry

size and respective goals. Forecasts are developed using both qualitative and quantitative data.

Although they are useful in making educated predictions, they are not always accurate, so they

should be used with caution. Operations managers are responsible for the processes that deliver

the final product. This where forecasts can help: They aid decision making and planning around

possible events.

Another topic in connection with forecasting is the main purpose of forecasting. Studying this

topic presents that making good estimates is the main purpose of forecasting. Every day,

operations managers make decisions with uncertain outcomes. No one can see the future to know

what sales will be, what will break, what new equipment will be needed, or what investments

will yield. Yet those decisions need to be made and executed to move the firm forward. It also

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helped me evaluate how a company's possible or future sales can be estimated through historical

data. The workforce is based on demand. This includes hiring, training, and lay-off of workers. If

a large demand is suddenly thrust upon the organization, training declines and the quality of the

product could suffer. When the capacity cannot keep up to the demand, the result is

undependable delivery, loss of customers, and maybe loss of market share. Yet, excess capacity

can skyrocket costs. Last minute shipping means high cost. Asking for parts last minute can raise

the cost. Most profit margins are slim, which means either of those scenarios can wipe out a

profit margin and have an organization operating at cost -- or at a loss.

These scenarios are why forecasting is important to an organization. Good operations managers

learn how to forecast, to trust the numbers, and to trust their instincts to make the right decisions

for their firm.

While it is also established that the manufacturing companies have a less difficult time in

forecasting due to its tangible outputs (goods), the service sector have a different strategy in

forecasting. Service sector industries have other unique factors to incorporate into their forecasts.

Local events can increase the need for hotel stays, food, gas, and more. Holidays will have an

impact. It can be narrowed to hours in the day around popular meal times. Tools for forecasting

in this regard include point of sale tracking that computes sales by the quarter hour to establish a

pattern for scheduling of personnel for peak times and deliveries or other activities during slower

periods.

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From the discussion, the class learned that an organization that utilizes a variety of forecasting

models to assets potential outcomes for a company can aid in combatting shortages on inventory.

The methods that are utilized by an individual organization will depend on the data available and

the industry in which the organization operation. The overall primary advantage pertaining to

forecasting is that it provides businesses with valuable information that the business is able to

use to make information about the future of the organization. Forecasting utilizes qualitative data

that depends on the judgement from experts such as operations managers. Unfortunately, it is not

possible to accurately forecast the future. Because of the qualitative nature of forecasting, a

business can come up with various scenarios depending upon the interpretation of data. This is

why businesses should never completely rely on forecast or any forecasting model. Having said

that, utilizing the data and forecasting models to conduct analysis and make decisions can greatly

benefit your operation.

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