OMIS 338 Exam 2 Review - Part 4

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1

Understand the importance of forecasting and its impact on various functions in a business

Impact on supply-chain management:

  • good supplier relations, advantages in product innovation, cost and speed to market

Impact on human resources:

  • hiring, training, laying off workers

Impact on capacity:

  • Shortages can result in undependable delivery, loss of customers, loss of market share
2

Types of Forecast based on time horizons

Short term:

  • less than 3 months-1 year.
    purchasing, job scheduling, workforce levels, job assignments, production levels

Medium Term:

  • 3 months - 3 years.
    sales and production planning, budgeting

Long Term:

  • 3+ years
    new product planning, facility location, research and development
3
  • Numerical calculations in the time series forecasting models – moving average, exponential smoothing
  • Mean Absolute Deviation used for measuring forecast error for improving forecast accuracy
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