Operations management heizer 6e ch04

Operations Management Chapter Forecasting PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 6e Operations Management, 8e © 2006 Prentice Hall, Inc Hall, Inc © 2006 Prentice 4–1 Outline  Global Company Profile: Tupperware Corporation  What Is Forecasting?  Forecasting Time Horizons  The Influence of Product Life Cycle  Types Of Forecasts © 2006 Prentice Hall, Inc 4–2 Outline – Continued  The Strategic Importance Of Forecasting  Human Resources  Capacity  Supply-Chain Management  Seven Steps In The Forecasting System © 2006 Prentice Hall, Inc 4–3 Outline – Continued  Forecasting Approaches  Overview of Qualitative Methods  Overview of Quantitative Methods © 2006 Prentice Hall, Inc 4–4 Outline – Continued  Time-series Forecasting Decomposition of a Time Series Naïve Approach Moving Averages Exponential Smoothing Exponential Smoothing with Trend Adjustment  Trend Projections  Seasonal Variations in Data  Cyclical Variations in Data      © 2006 Prentice Hall, Inc 4–5 Outline – Continued  Associative Forecasting Methods: Regression And Correlation Analysis  Using Regression Analysis to Forecast  Standard Error of the Estimate  Correlation Coefficients for Regression Lines  Multiple-Regression Analysis © 2006 Prentice Hall, Inc 4–6 Outline – Continued  Monitoring And Controlling Forecasts  Adaptive Smoothing  Focus Forecasting  Forecasting In The Service Sector © 2006 Prentice Hall, Inc 4–7 Learning Objectives When you complete this chapter, you should be able to : Identify or Define:  Forecasting  Types of forecasts  Time horizons  Approaches to forecasts © 2006 Prentice Hall, Inc 4–8 Learning Objectives When you complete this chapter, you should be able to : Describe or Explain:  Moving averages  Exponential smoothing  Trend projections  Regression and correlation analysis  Measures of forecast accuracy © 2006 Prentice Hall, Inc 4–9 Forecasting at Tupperware  Each of 50 profit centers around the world is responsible for computerized monthly, quarterly, and 12-month sales projections  These projections are aggregated by region, then globally, at Tupperware’s World Headquarters  Tupperware uses all techniques discussed in text © 2006 Prentice Hall, Inc – 10 Correlation  How strong is the linear relationship between the variables?  Correlation does not necessarily imply causality!  Coefficient of correlation, r, measures degree of association  Values range from -1 to +1 © 2006 Prentice Hall, Inc – 97 Correlation Coefficient n xy -  x y r= © 2006 Prentice Hall, Inc [n x2 - ( x)2][n y2 - ( y)2] – 98 y Correlation Coefficient y r= n∑xy - ∑x∑y [n∑x2 - (∑x)2][n∑y2 - (∑y)2] (a) Perfect positive x correlation: r = +1 (b) Positive correlation: 0