Operation management 10e heizer render chapter 04

Operations Management Chapter – Forecasting PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 7e Operations Management, 9e © 2008 Prentice Hall, Inc 4–1 Outline  Global Company Profile: Disney World  What Is Forecasting?  Forecasting Time Horizons  The Influence of Product Life Cycle  Types Of Forecasts © 2008 Prentice Hall, Inc 4–2 Outline – Continued  The Strategic Importance of Forecasting  Human Resources  Capacity  Supply Chain Management  Seven Steps in the Forecasting System © 2008 Prentice Hall, Inc 4–3 Outline – Continued  Forecasting Approaches  Overview of Qualitative Methods  Overview of Quantitative Methods © 2008 Prentice Hall, Inc 4–4 Outline – Continued  Time-Series Forecasting Decomposition of a Time Series Naive Approach Moving Averages Exponential Smoothing Exponential Smoothing with Trend Adjustment  Trend Projections  Seasonal Variations in Data  Cyclical Variations in Data      © 2008 Prentice Hall, Inc 4–5 Outline – Continued  Associative Forecasting Methods: Regression and Correlation Analysis  Using Regression Analysis for Forecasting  Standard Error of the Estimate  Correlation Coefficients for Regression Lines  Multiple-Regression Analysis © 2008 Prentice Hall, Inc 4–6 Outline – Continued  Monitoring and Controlling Forecasts  Adaptive Smoothing  Focus Forecasting  Forecasting In The Service Sector © 2008 Prentice Hall, Inc 4–7 Learning Objectives When you complete this chapter you should be able to :  Understand the three time horizons and which models apply for each use  Explain when to use each of the four qualitative models  Apply the naive, moving average, exponential smoothing, and trend methods © 2008 Prentice Hall, Inc 4–8 Learning Objectives When you complete this chapter you should be able to :  Compute three measures of forecast accuracy  Develop seasonal indexes  Conduct a regression and correlation analysis  Use a tracking signal © 2008 Prentice Hall, Inc 4–9 Forecasting at Disney World  Global portfolio includes parks in Hong Kong, Paris, Tokyo, Orlando, and Anaheim  Revenues are derived from people – how many visitors and how they spend their money  Daily management report contains only the forecast and actual attendance at each park © 2008 Prentice Hall, Inc – 10 Correlation Coefficient r= © 2008 Prentice Hall, Inc nΣ xy - Σ xΣ y [nΣ x2 - (Σ x)2][nΣ y2 - (Σ y)2] – 100 Correlation Coefficient y y nΣ xy - Σ xΣ y r= 2 2 [ n Σ x ( Σ x ) ][ n Σ y ( Σ y ) x (a) Perfect positive (b) Positive ] correlation: r = +1 x correlation: 0