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DM-PPT-Chapter-03-Demand Management & Forcasting

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54 views13 pages

DM-PPT-Chapter-03-Demand Management & Forcasting

Uploaded by

zobayer ahamed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Demand Management
and
Forecasting
15-3

OBJECTIVES
• Demand Management
• Qualitative Forecasting
Methods
• Simple & Weighted Moving
Average Forecasts
• Exponential Smoothing
• Simple Linear Regression
• Web-Based Forecasting
15-4

Demand Management

Independent Demand:
Finished Goods

Dependent Demand:
A Raw Materials,
Component parts,
Sub-assemblies, etc.
B(4) C(2)

D(2) E(1) D(3) F(2)


15-5

Independent Demand:
What a firm can do to manage it?

• Can take an active role to influence


demand

• Can take a passive role and simply


respond to demand
15-6

Types of Forecasts

• Qualitative (Judgmental)

• Quantitative
– Time Series Analysis
– Causal Relationships
– Simulation
15-7

Components of Demand

• Average demand for a period of


time
• Trend
• Seasonal element
• Cyclical elements
• Random variation
• Autocorrelation
15-8

Finding Components of Demand

Seasonal variation

x
x x Linear
x x
x x Trend
x x
Sales

x x x
x
x
xx
x xx x x
x
x
x x x x x x
x x x x x x
x x x
x xxxxx
x
x x

1 2 3 4
Year
15-9

Qualitative Methods

Executive Judgment Grass Roots

Historical analogy Qualitative Market Research


Methods

Delphi Method Panel Consensus


15-10

Delphi Method

l. Choose the experts to participate representing


a variety of knowledgeable people in different
areas
2. Through a questionnaire (or E-mail), obtain
forecasts (and any premises or qualifications
for the forecasts) from all participants
3. Summarize the results and redistribute them
to the participants along with appropriate new
questions
4. Summarize again, refining forecasts and
conditions, and again develop new questions
5. Repeat Step 4 as necessary and distribute the
final results to all participants
15-11

Time Series Analysis

• Time series forecasting models try


to predict the future based on past
data
• You can pick models based on:
1. Time horizon to forecast
2. Data availability
3. Accuracy required
4. Size of forecasting budget
5. Availability of qualified personnel
15-12

Web-Based Forecasting: CPFR

• Collaborative Planning, Forecasting, and


Replenishment (CPFR) a Web-based tool used
to coordinate demand forecasting, production
and purchase planning, and inventory
replenishment between supply chain trading
partners.
• Used to integrate the multi-tier or n-Tier supply
chain, including manufacturers, distributors
and retailers.
• CPFR’s objective is to exchange selected
internal information to provide for a reliable,
longer term future views of demand in the
supply chain.
• CPFR uses a cyclic and iterative approach to
derive consensus forecasts.
15-13

Web-Based Forecasting:
Steps in CPFR

1. Creation of a front-end partnership


agreement.
2. Joint business planning
3. Development of demand forecasts
4. Sharing forecasts
5. Inventory replenishment

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