Planning and Forecasting. Chapter Objectives Explain the needs for planning and analyze a planning...
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Transcript of Planning and Forecasting. Chapter Objectives Explain the needs for planning and analyze a planning...
![Page 1: Planning and Forecasting. Chapter Objectives Explain the needs for planning and analyze a planning model Be able to solve forecasting problems.](https://reader035.fdocuments.net/reader035/viewer/2022062314/56649f395503460f94c55982/html5/thumbnails/1.jpg)
Planning and Forecasting
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Chapter Objectives
Explain the needs for planning and analyze a planning model
Be able to solve forecasting problems
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PlanningProvides method for identifying objectives Designs a sequence of programs and activities to
achieve objectives Plan to plan (a continuous process & evaluation) People implementing plan should be involved in
preparing plan
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The Planning Process & the Decision Making Process
Iterative, interactive and interdependent processes Define the decision problem Search for data and information Generate alternative courses of action Analyze feasible alternatives Select best course of action (most feasible route) Implement “the selected” decision and evaluate
results
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Planning
What is the Problem/Purpose? Establish Goal/Objectives What Client Need Is Being Satisfied by the Project? Identify Success Criteria
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The Foundation for Planning
-Vision : what the firm wants to be in the future (no vision leads to a disaster in most cases)
-Mission : bold goal with clear finish line and specific time frame, what do we want to do
-Purpose : fundamental reason for firm’s existence -Goal/Aim : What? Why? For whom? How? Is it
consistent with organization? (official and operative) -Objectives : Clarifies goals, how do we go about it? Note: ALL of the above parameters must be
reviewed often to see whether they are still valid or need updating
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Planning Develop Objectives
Specific Measurable Attainable Realistic Time-limited Outcome - what is to be accomplished Time Frame - expected completion date Measure - metrics for success Action - how the objective will be met
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Strategic Management of Technology
Base technology: firm must master it to be effective competitors, invest in R&D to maintain competence
Key technology: provides competitive advantage, can embed features to get better efficiency in production process
Pacing technology: could become tomorrow’s key tech.
It is a critical issue to maintain balance between key and pacing techs.
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Some planning concepts
Responsibility for planning: rests with top and middle level mgrs. Must establish enterprise objectives, overall strategy, planning guidelines, review and redirect planning effort
Planning premises: the anticipated environment in which plans are expected to operate. Future economic conditions, govt. decisions, competition and markets. Develop contingency plans if premises go wrong
Planning horizon: how far one should plan. Depends on nature of business and plan. Ex. Nuclear power plant
System of plans: yearly forecasts Policies and procedures: policies -> clear, flexible,
communicated, procedures ->
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Forecasting
Forecast sales Essential preliminary to effective planning Engineering manager must be concerned with both
future markets and future technology
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Why Forecasting?
New facility planning Production planning Work force scheduling
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Long Range Forecasts
Design new products Determine capacity for new product Long range supply of materials
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Short Range Forecasts
Amount of inventory for next month Amount of product to produce next week How much raw material delivered next week Workers schedule next week
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Forecasting Methods
Quantitative Methods Expert/executive Opinion, Delphi Historical (sales force composite): regional managers ask their salesmen
User expectation: ask customers, good if few customers
Choice of method: many methods can be combined Qualitative Methods Simple moving average Weighted moving average Exponential smoothing Regression models (simple/multiple regressions)
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Delphi Method
Eliminates effects of interactions between members Experts do not need to know who other experts are
Delphi coordinator asks for opinions, forecasts on subject
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Delphi Method, cont
Develop objective of forecast Determine number of participants Select and contact participants Develop first questionnaire and submit
Coordinator analyzes responses
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Delphi Method, cont
Develop second questionnaire based on results of first
Analyze responses Rounds continue until consensus reached or experts’
opinions cease to change