It is a method for translating past data or experience into estimates of the future. It is a tool, which helps management in its attempts to cope with the uncertainty of the future.
Forecasting involves using several different methods of estimating to determine possible future outcomes for the business. Planning for these possible outcomes is the job of operations management. Additionally, operations management involves the managing of the processes required to manufacture and distribute products.
Important aspects of operations management include creating, developing, producing and distributing products for the organization. Advantages of Forecasting An organization uses a variety of forecasting models to assess possible outcomes for the company. The methods used by an individual organization will depend on the data available and the industry in which the organization operates.
The primary advantage of forecasting is that it provides the business with valuable information that the business can use to make decisions about the future of the organization. In many cases forecasting uses qualitative data that depends on the judgment of experts.
Disadvantages of Forecasting Models It is not possible to accurately forecast the future.
Because of the qualitative nature of forecasting, a business can come up with different scenarios depending upon the interpretation of the data. For this reason, organizations should never rely percent on any forecasting model.
However, an organization can effectively use forecasting models with other tools of analysis to give the organization the best possible information about the future.
Making a decision on a bad forecast can result in financial ruin for the organization, so an organization should never base decisions solely on a forecast.
Advantages of Operations Management Operations management can help an organization implement strategic objectives, strategies, processes, planning and controlling. One of the primary focuses of operations management is to effectively manage the resources of an organization so that the organization can maximize the potential of the products or services produced or offered by the company.
Depending on the organization, operations management can include managing human resources, materials, information, production, inventory, transportation, logistics, purchasing and procurement. Disadvantages of Operations Management Operations management depends on many different components within the organization working together to achieve success.
Even if operations management implements an effective plan, if operations management does not carry out the plan properly, the plan will most likely fail. Within an organization, mistakes often occur during the chain of events from manufacturing to sale.
Therefore, operations management requires the coordination of operation functions, marketing, finance, accounting, engineering, information systems and human resources to have success within the organization.
References 2 Operations Management:The forecasting of econometric time-series can be done with a range of models including basically linear and non-linear models. Based on the assumption that the time-series is a realisation of a.
Forecasting One Time-Series Variable From Others When time-series variables X and U can help forecast another variable Y, X and U are often called "leading indicators" of Y.
To develop forecasting formulas which include such variables, simply add the lagged forms of the other variables to the model. The Time Series Forecasting System is a point-and-click system that provides automatic model fitting and forecasting as well as interactive model development.
The system provides a completely automatic forecasting model selection feature that selects the best-fitting model for each time series.
individual series. Disadvantages Large number of series to be forecast. Constructing forecasting models is harder because of noisy data at bottom level.
No prediction Forecasting hierarchical time series Hierarchical time series A new approach We propose a new statistical framework for. Forecasting time series can be a very hard task due to the inherent uncertainty nature of these systems. It seems very difficult to tell whether a series is .
Examples of Time Series Behavior A trend is a gradual, long-term, upward or downward movement in demand.
A current trend is the steady increase in sales of personal computers over the past few years. A cycle is an up-and-down movement in demand that repeats itself over a longer time span. Automotive sales often behave in a cyclical pattern.