Steps inwards Production Forecasting Process
Steps inwards a production forecasting procedure are depicted inwards the ikon below.
Image Credits © Luna Rodriguez.
The stages or steps inwards a production forecasting procedure are listed equally follows:
- Fix the forecasting objectives.
- Decide what to forecast?
- Determine the fourth dimension frame.
- Collect the information for forecasting.
- Select the forecasting model
- Build as well as exam the forecasting model.
- Prepare the forecasts.
- Prepare the forecasts.
- Compare events amongst the forecasts.
Now let's utter over each pace of production forecasting procedure 1 past times one.
1. Fix the forecasting objectives
The production managing director must starting fourth dimension hit the forecasting objectives. That is, he must know precisely why he is doing production forecasting. Forecasting objectives answers the interrogation like, why are nosotros forecasting? Here, the respond to this interrogation may be; nosotros are doing forecasting to assistance us inwards marketing planning, or nosotros are doing forecasting to assistance us inwards the found capacity planning, etc. If nosotros know precisely why nosotros are forecasting, as well as hence nosotros tin collect proper information for that purpose. This volition outcome inwards to a greater extent than accurate forecasting.
2. Decide what to forecast?
After finding out why to forecasts, the production managing director must respond the question, what to forecast? That is, are nosotros forecasting the book of production, value of sales, the amount of finance required, seat out of workers required for hereafter production as well as hence on. The production managing director must hit upwards one's hear the units of measuring such equally volume, value, etc. for forecasting.
3. Determine the fourth dimension frame
The production managing director as well as hence fixes or determine the fourth dimension frame for the production forecast. That is, he must respond the question, for what catamenia are nosotros making a forecast? In other words, whether the forecast is made for a week, a month, 3 months, vi months, 1 yr or more.
4. Collect the information for forecasting
The production managing director must hit the database. That is, he must hit upwards one's hear from where he volition collect the information for forecasting. In other words, he must hit upwards one's hear whether to collect information from internal sources or external sources. He must too hit upwards one's hear whether to utilisation quantitative information or qualitative data. So, inwards this 4th step, the production managing director decides near the type of information which he volition utilisation for forecasting.
5. Select the forecasting model
In this step, the production managing director must hit upwards one's hear the method or model of forecasting which he volition use. There are many methods of forecasting. There are qualitative as well as quantitative methods. The qualitative methods such equally Nominal Group Technique, Delphi technique, etc. are to a greater extent than suitable for novel products. However, for existing products, amongst stable demand, quantitative methods such equally Simple Moving Average Technique should endure used.
6. Build as well as exam the forecasting model
In this step, the production managing director uses a purpose of the available information to construct a forecasting model. Influenza A virus subtype H5N1 model is a statistical or mathematical formula. He uses the other purpose of the information to exam the model. That is, he volition apply the formula as well as run into whether it gives the accurate respond or not. If not, he volition brand necessary changes to the formula until he gets satisfactory results.
7. Prepare the forecasts
After selecting the forecasting model, the production managing director must railroad train the forecasts for a specific catamenia for the exceptional product. The catamenia may endure weekly, monthly, etc.
8. Present the forecasts
In this step, the production managing director gives or presents the forecasts to those who volition utilisation it. He must too furnish detailed information about, how the forecast was made, from where the information was collected, what are the assumptions of the forecasts, etc.
9. Compare events amongst the forecasts
Here, inwards this concluding step, the actual events or functioning is compared amongst the forecasts. The deviations are corrected, wherever possible or the forecasts are modified.
