forecasting presentation
DESCRIPTION
This Presentation is on Forcasting.TRANSCRIPT
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FORECASTING AT ROSS PRODUCTS
By: Ravi Kanudawala (3905139) Mayur Somaiya (3905128) Ajay Raval (3905225)
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FORECASTING
Forecasting is the process of making statements about events
whose actual outcomes (typically) have not yet been observed.
For example, it might be estimation for some variable of interest
at some specified value date.
Forecasting is used in the practice of Customer Demand
Planning in every day business forecasting for manufacturing
companies.
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TYPES OF FORECASTING
Quantitative forecasting
Naïve forecasting Approach
Time Series Forecasting methods
Causal / econometric forecasting methods
Judgmental forecasting methods
Artificial Intelligence forecasting methods
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REGRESSION ANALYSIS
The Regression Analysis is part of Causal / econometric
forecasting methods.
It includes a large group of methods that can be used to
predict future values of a variable using information about
other variables.
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STRATEGIC BUSINESS PLANNING
Level of aggregation Total sales or output volume
Top Management involvement intensive
Forecast frequency Annual or less
Length of forecast Year by years or quarters
Usual techniques Management judgment, regression.
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SALES AND OPERATIONS PLANNING
Level of aggregation Product family units
Top Management involvement When reconciling functional plans or moderate
Forecast frequency Monthly to quarterly
Length of forecast Several months to a year by months
Usual techniques Aggregation of detailed forecasts, customer plans
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MASTER PRODUCTION SCHEDULING AND CONTROL
Level of aggregation Individual finished goods or components
Top Management involvement Very little or Minimal
Forecast frequency Constantly
Length of forecast A few days to weeks
Usual techniques Projection techniques (smoothing, moving average)
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INTRODUCTION
The Ross Products is division of Abbott laboratories and is situated in
Columbus , Ohio.
It produces a variety of nutritional products including adult medical
nutrition supplements, pediatric infant formulas, as well as ancillary
equipment.
For example, pump which supplies nutritional liquids to the stomach.
Mainly there are four manufacturing facilities in US.
Ross markets its products in United States and Overseas.
They using log*plus program to perform demand management activities.
Log*plus produces forecasts from nation inputs and monitors actual
demands against these forecasts.
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PROCEDURE
Vendor-managed inventory
Other Customers Orders
Marketing and sales forecasts by
products groups
Demand Management
Breakout of national forecast by plant
Forecast consolidation and
conversion ( to SKU by plant)
Meeting for revising the forecast
Forecast available for manufacturing
Planning
Meeting for forecast review
International Forecast
EDI
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Deviation
Deviation
Deviation
Deviation
Deviation
Deviation
Deviation
Time
Valu
es o
f D
ep
en
den
t V
ari
ab
le
bxaY ˆ
Actual observation
Point on regression line
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Used for forecasting linear trend line
Assumes relationship between response variable, Y, and time, X, is a linear function
iY a bX i= +
LINEAR TREND PROJECTION
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LINEAR REGRESSION EQUATIONS
Equation:
ii bxaY
Slope: 22
i
n
1i
ii
n
1i
xnx
yxnyx b
Y-Intercept:
xby a
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Questions ???
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Thank you