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The newly promoted inventory manager wonders if there is an easier, more reliable means of forecasting sales demand. Currently, forecasts are based on the plant manager's, sales/marketing manager's, and inventory manager's knowledge of industry trends, competitive strategies, and sales history. The inventory manager must decide if using statistical forecasting methods would ease the forecasting process and make the forecasts more reliable. Students are exposed to different forecasting techniques, including executive opinion, linear regression, and time series. The data characteristics include seasonality, trend, and random fluctuations.
LEARNING OBJECTIVE:
To provide an introduction to demand forecasting. Students are expected to understand the strengths and weaknesses of various forecasting methods and tools, the managerial implications of alternative forecasting methods, and to recognize the difficulty in developing and maintaining accurate forecasting systems.
SUBJECTS COVERED:
Demand analysis; Forecasting; Managing uncertainty; Manufacturing; Planning
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