Professional Documents
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Strategies For Production Planning
Strategies For Production Planning
Objective: Outline
Outline the
the
strategies
strategies used
used in
in various
various
dimensions
dimensions of
of production
production
planning
planning
Strategies for Production
Planning
• Forecasting Techniques
• Product Design Planning
• Layout of Business
• Scheduling
Forecasting Techniques
• Sales force composite
• Delphi method
• Consumer surveys
• Jury of experts
• Moving averages
• Least squares regression
Forecasting
• Forecasting is the art and science of
predicting future events.
• There are two approaches to
forecasting, namely:
- Qualitative and
- Quantitative approaches
Qualitative Forecasting
Techniques
• Jury of Executive Opinion (Jury of
Experts)
• Sales Force Composite
• Delphi Method
• Consumer Market Surveys (consumer
surveys)
Jury of Experts
• Under this method, the opinions of a
group of high-level managers, often
in combination with statistical
models, are pooled to arrive at a
group estimate of demand
Sales Force Composite
• In this approach, each salesperson
estimates what sales will be in his or
her region.
• These forecasts are then reviewed
to ensure they are realistic and then
combined at the district and national
levels to reach an overall forecast.
Delphi Method
• There are three different types of participants in the Delphi
Method:
- decision makers
- Staff personnel and
- Respondents
• The decision makers usually consist of a group of 5 to 10 experts
who will be making the actual forecast.
• The staff personnel assist the decision makers by preparing,
distributing, collecting and summarizing a series of questionnaires
and survey results.
• The respondents are a group of people, often located in different
places, whose judgments are valued and are being sought.
• This group provides inputs to the decision makers before the
forecast is made. See example
The State of Alaska used
the Delphi Method
Alaska’s economy is dominated by oil. An amazing 90%
of the state’s budget is derived from 1.5 million barrels
of oil pumped daily through a pipeline at Prudhoe Bay.
To develop a long-range economic forecast, the State
of Alaska turned to the Delphi Method. The large
Delphi panel of experts had to represent all groups and
opinions in the state and all geographic areas. But
Delphi was the perfect forecasting tool because
panelist travel could be avoided. It also meant leading
Alaskans could participate because their schedules
were not impacted by meetings and distances.
Consumer Market Survey
• This method solicits input from
customers or potential customers
regarding their future purchasing plans.
• It can help not only in preparing a
forecast, but also in improving product
design and planning for new products
Overview of Quantitative
Methods
Quantitative approaches to forecasting include:
• Naïve approach
• Moving averages
• Exponential smoothing
• Trend projection
• Linear-regression causal model
• Least Squares Regression