Operations
Management
Forecasting
Chapter 4
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Outline
 GLOBAL COMPANY PROFILE: TUPPERWARE
CORPORATION
 WHAT IS FORECASTING?


Forecasting Time Horizons
The Influence of Product Life Cycle
 TYPES OF FORECASTS
 THE STRATEGIC IMPORTANCE OF
FORECASTING



Human Resources
Capacity
Supply-Chain Management
 SEVEN STEPS IN THE FORECASTING SYSTEM
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Principles of Operations Management, 5e, and Operations
Management, 7e
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© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Outline - Continued
 FORECASTING APPROACHES


Overview of Qualitative Methods
Overview of Quantitative Methods

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

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

Decomposition of Time Series
Naïve Approach
Moving Averages
Exponential Smoothing
Exponential Smoothing with Trend Adjustment
Trend Projections
Seasonal Variations in Data
Cyclic Variations in Data
 TIME-SERIES FORECASTING
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Principles of Operations Management, 5e, and Operations
Management, 7e
4-3
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
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

 MONITORING AND CONTROLLING
FORECASTS
Adaptive Smoothing
 Focus Forecasting

 FORECASTING IN THE SERVICE SECTOR
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Principles of Operations Management, 5e, and Operations
Management, 7e
4-4
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Learning Objectives
When you complete this chapter, you should be able
to :
Identify or Define:
Forecasting
 Types of forecasts
 Time horizons
 Approaches to forecasts

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Principles of Operations Management, 5e, and Operations
Management, 7e
4-5
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Learning Objectives - continued
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

PowerPoint presentation to accompany Heizer/Render –
Principles of Operations Management, 5e, and Operations
Management, 7e
4-6
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458