SCM 303
Exam 3 Outline SCM 303
Chapter 12
Demand Planning: Forecasting and demand management
Demand Planning- the combined process of forecasting and managing customer demands to create a planned pattern of demand that meets the firm’s operational and financial goals. Fluctuating customer demand cause operational inefficiencies, such as: Need for extra capacity resources, backlog, customer dissatisfaction, system buffering (safety stock, safety lead time, capacity cushions, etc.)
3 basics tactics to influence demand- influence the timing or quantity of demand through pricing changes or promotions. Managing the timing of order fulfillment. Encourage customers to shift their orders from one product to another, or from one service provider to another. Pg 358 for detailed.
Improving planning management- improving info accuracy and timeliness, reducing lead time, redesigning the product: manufacturing postponement, logistics solutions- logistics (geographic) postponement, variable assignment. Collaborating and sharing information
Demand forecasting- a decision process in which managers predict demand and make operational plans accordingly
Demand management- a proactive approach in which managers attempt to influence either the pattern or consistency of demand.
Stable Pattern- a consistent horizontal stream of demands
Seasonality and cycles- regular demand patterns of repeating highs and lows.
Trend- the general sloping tendency of demand, either upward or downward, in a linear or nonlinear fashion
Shift or step change- a onetime change in demand, usually due to some external influence on demand.
Autocorrelation- the correlation of current demand values with past demand values.
Forecast error- the difference between a forecast and the actual demand.
Forecast accuracy- measures how closely the forecast aligns with the observations over time. Every error, whether positive or negative, reduces forecast accuracy.
Chapter 12
Demand Planning: Forecasting and demand management
Demand Planning- the combined process of forecasting and managing customer demands to create a planned pattern of demand that meets the firm’s operational and financial goals. Fluctuating customer demand cause operational inefficiencies, such as: Need for extra capacity resources, backlog, customer dissatisfaction, system buffering (safety stock, safety lead time, capacity cushions, etc.)
3 basics tactics to influence demand- influence the timing or quantity of demand through pricing changes or promotions. Managing the timing of order fulfillment. Encourage customers to shift their orders from one product to another, or from one service provider to another. Pg 358 for detailed.
Improving planning management- improving info accuracy and timeliness, reducing lead time, redesigning the product: manufacturing postponement, logistics solutions- logistics (geographic) postponement, variable assignment. Collaborating and sharing information
Demand forecasting- a decision process in which managers predict demand and make operational plans accordingly
Demand management- a proactive approach in which managers attempt to influence either the pattern or consistency of demand.
Stable Pattern- a consistent horizontal stream of demands
Seasonality and cycles- regular demand patterns of repeating highs and lows.
Trend- the general sloping tendency of demand, either upward or downward, in a linear or nonlinear fashion
Shift or step change- a onetime change in demand, usually due to some external influence on demand.
Autocorrelation- the correlation of current demand values with past demand values.
Forecast error- the difference between a forecast and the actual demand.
Forecast accuracy- measures how closely the forecast aligns with the observations over time. Every error, whether positive or negative, reduces forecast accuracy.