Chs 4 and whatever Flashcards
Forecasting
Is the art and science of predicting future events
Short-Range Forecast
Generally less than three months. Utilize more mathematical techniques like exponential smoothing, and tend to be the most accurate form of forecasting.
Medium-Range Forecast
Generally between three months and 3 years.
Long-Range Forecast
Generally greater than 3 years. Deal with more comprehensive issues supporting management decisions.
Economic Forecasts
Address the business cycle by predicting inflation rates, money supplies housing starts and other planning indicators.
Technological Forecasts
Are concerned with rates of technological progress, which can result in the birth of exciting new products, requiring new plants and equipment.
Demand Forecasts
Projections of demand for a company’s products or services.
What is the only estimate of demand until actual demand is known?
The forecast
Product demand forecast affects three things:
Supply-chain management, human resources, and capacity.
Qualitative Methods:
Jury of Executive Opinion, Delphi Method, Sales Force Composite, and Market Survey.
Quantitative Methods:
Naive Approach, Moving Averages, Exponential Smoothing, Trend Projection, Linear Regression
The four components of a time series:
Trend, seasonality, cycles and random variations.
Moving Averages present three problems:
Increasing N makes the method less sensitive to changes in the data, moving averages can’t pick up trends well and moving averages require extensive records of past data.
Exponential Smoothing equation:
Last period’s forecast + smoothing constant (last period’s actual demand - last period’s forecast)
Equation for MAD:
summation of actual minus forecasted, over n
In order to use the least squares method,:
We always plot the data because least-squares data assume a linear relationship. We don’t predict time periods. Also, deviations around the least-squares line are assumed to be random and normally distributed.
The objective of inventory management?
To strike a balance between inventory investment and customer service.
What are the four types of inventory?
Raw Material, Work-In-Process, (Maintenence, Repair, Operating (MRO),) Finished Goods.
What ic cycle counting?
Where Items are counted and records updated on a periodic basis
Independent Demand vs. Dependent Demand?
Independent demand - the demand for item is independent of the demand for any other item in inventory Ex. cars at car shop
Dependent demand - the demand for item is dependent upon the demand for some other item in the inventory. Ex. - car shop w/ tires
What types of costs are there?
Holding costs, ordering costs, setup costs
What are holding costs?
Costs of holding inventory over time. Ex. - security for warehouse, electricity for warehouse, other things FOR WAREHOUSE
What are ordering costs?
Costs of placing an order and recieving goods. Ex. - computer system and its administrators.
What are setup costs?
Preparing machine or process for manufacturing order. Ex. - changing kind of product.
How do you do Model 1 of EOQ?
EOQ = square root of (2DS / H)
then…
TC = (D / Q) S + (Q / 2) H
How do you do Model 2?
Q* = square root of (2DS / H [1-(d/p)] TC = (D/Q)S + 1/2HQ(1-(d/p))
Dependent Inventory Model Requirements?
- Master production schedule
- Bill of materials
- Inventory availability
- accurate inventory records
- lead time
How much in debt are we?
17 trillion, MOTHERFUCKER
How many unfunded liabilities do we have?
123 billion MUFUCKA
How much $ spent to make Affordable Care Act?
634 million BITCHHH
