Germany: An Economic Powerhouse
Germany has always been an economic powerhouse. In fact, in the last century, the economy of Germany has been completely annihilated by the world wars that it fought. However, it has still managed to bounce back. Today Germany is the biggest economy in Europe. It is also the second largest exporter in the world and […]
An Introduction to Process Documentation
Multinational companies are facing the problem of knowledge management. Industries like software and ITES hire extremely skilled employees to work for them. However, they face several problems. This is because the skill lies in the “employee’s minds” and not in the system. As a result, if the employee goes on long leave or quits the […]
Warehouse and Materials Management – Need and Scope
Introduction Purchase of raw materials is an integral part of any business, i.e. manufacturing organization or service organization. Purpose of raw material is to be converted into finished goods for selling, but after purchase and before selling, they need to keep in safety and good care. The timeframe of storage can be short period or […]
Different types of Data and its Importance
Data can be described as the backbone of any six sigma project. This is because the whole idea of six sigma and operations is to use statistics to manage operations in the factory workshop. Hence, for a six sigma team to understand the types of data and when and how to use them is of […]
BPM Notations – Gateways and Events
Using Gateways Gateways can split your processes into multiple paths. This is because the path which the process will take at execution is based on conditions at execution. It cannot be defined while designing. Gateways thus model all the options that the process has i.e. all the possible paths that can be taken by a […]
For an organization to provide customer delight it is important that organization can understand what customer wants and how much does they want. If an organization can gauge future demand that manufacturing plan becomes simpler and cost effective.
The process of analyzing and understanding current and past information to understand the future patterns through a scientific and systemic approach is called forecasting. And the process of estimating the future demand of product in terms of a unit or monetary value is referred to as demand forecasting.
The purpose of forecasting is to help the organization manage the present as to prepare for the future by examining the most probable future demand pattern. However, forecasting has its constraint for example we cannot estimate a pattern for technologies and product where there are no existing pattern or data.
The very objective of business forecasting is to be accurate as possible, so that planning of resources can be done in a very economical manner and therefore, propagate optimum utilization of resources.
Business forecasting helps in establishing relationship among many variables, which go into manufacturing of the product. Each forecast situation must be analyzed independently along with forecasting method.
Business forecasting has many dimensions and varieties depending upon the utility and application. The three basic forms are as follows:
A forecast and its conclusion are valid within specific time frame or horizon. These time horizons are categorized as follows:
A good forecast is should provide sufficient time with a fair degree of accuracy and reliability to prepare for future demand. A good forecast should be simple to understand and provide information relevant to production (e.g. units, etc.)
Forecasting is divided into two broad categories, techniques and routes. Techniques are further classified into quantitative techniques and qualitative techniques. Quantitative techniques comprise of time series method, regression analysis, etc., where as qualitative methods comprise of Delphi method, expert judgment.
Routes forecasting consist of top-down route and bottom-up route.
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