demand forcasting
Part 3 : Acquisition & Production Support.
Ch.3 Demand Forecasting.
Edited by Dr. Seung Hyun Lee (Ph.D., CPL)
IEMS Research Center,
E-mail : lkangsan@iems.co.kr
Demand Forecasting.
[Other Resource]
Definition.
․ An estimate of future demand.
․ A forecast can be determined by mathematical means using historical, it can be created subjectively by using estimates from informal sources, or it can represent a combination of both techniques. - 2 -
Demand Forecasting.
[Other Resource]
Why Forecast ?
․ To plan for the future by reducing uncertainty.
․ To anticipate and manage change.
․ To increase communication and integration of planning teams.
․ To anticipate inventory and capacity demands and manage lead times.
․ To project costs of operations into budgeting processes.
․ To improve competitiveness and productivity through decreased costs and improved delivery and responsiveness to customer needs. - 3 -
Demand Forecasting.
[Other Resource]
Demand Forecasting System.
￭ Constructing Demand Forecasting System.
1. Determine the information that needs to be forecasted.
․ This includes defining the source of the historical data to be provided and the periods over which the data will be collected.
2. Assign responsibility for the forecast to a person which performance will be measured on the accuracy of actual sales to the forecast.
3. Setup forecast system parameters :
․ Forecast horizon.
․ Forecast level : Business unit, Product family, Model and brand, or SKU.
․ Forecast period and frequency.
․ Forecast revision : The way in which changes to the forecast will be recorded, such
as
original
forecast,
revised
forecast,
subsequently
revised
forecast, current forecast.
- 4 -
Demand Forecasting.
[Other Resource]
Demand Forecasting System.
￭ Constructing Demand Forecasting System.
4. Select appropriate forecasting models and techniques.
5. Collect data for input to forecasting
Ch.3 Demand Forecasting.
Edited by Dr. Seung Hyun Lee (Ph.D., CPL)
IEMS Research Center,
E-mail : lkangsan@iems.co.kr
Demand Forecasting.
[Other Resource]
Definition.
․ An estimate of future demand.
․ A forecast can be determined by mathematical means using historical, it can be created subjectively by using estimates from informal sources, or it can represent a combination of both techniques. - 2 -
Demand Forecasting.
[Other Resource]
Why Forecast ?
․ To plan for the future by reducing uncertainty.
․ To anticipate and manage change.
․ To increase communication and integration of planning teams.
․ To anticipate inventory and capacity demands and manage lead times.
․ To project costs of operations into budgeting processes.
․ To improve competitiveness and productivity through decreased costs and improved delivery and responsiveness to customer needs. - 3 -
Demand Forecasting.
[Other Resource]
Demand Forecasting System.
￭ Constructing Demand Forecasting System.
1. Determine the information that needs to be forecasted.
․ This includes defining the source of the historical data to be provided and the periods over which the data will be collected.
2. Assign responsibility for the forecast to a person which performance will be measured on the accuracy of actual sales to the forecast.
3. Setup forecast system parameters :
․ Forecast horizon.
․ Forecast level : Business unit, Product family, Model and brand, or SKU.
․ Forecast period and frequency.
․ Forecast revision : The way in which changes to the forecast will be recorded, such
as
original
forecast,
revised
forecast,
subsequently
revised
forecast, current forecast.
- 4 -
Demand Forecasting.
[Other Resource]
Demand Forecasting System.
￭ Constructing Demand Forecasting System.
4. Select appropriate forecasting models and techniques.
5. Collect data for input to forecasting