1. Planning Modern Green Manufacturing Systems: Forecasting
Tech 147: Unit 3
Planning Modern Green Manufacturing Systems: Forecasting

2. On Planning for Future
If a man take no thought about what is distant, he will find sorrow near at hand (Confucius)

3. Forecasting Defined The process of estimation in unknown situations
The process of prediction
The practice of demand planning

4. Definitions Exponential smoothing Trend (e.g. seasonal)
Forecast Prediction
Growth analysis Qualitative forecast
Horizon Quantitative forecast
MRP Time-series forecast
Lead time Regression forecast
Model-forecast Moving average
Kanban JIT
Planning period Gross/net requirements
Inventory item Scheduled receipts

5. Jacobs Et Al Chapter 2: Demand Management
Through demand management all potential demands on manufacturing capacity are collected and coordinated
This activity manages day-to-day interactions between customers and the company

6. Demand Management in the MPC System

7. Demand Management and the MPC Environment
Forecasts of end items, spare parts, and other items in demand should be a part of the front-end modules of the MPC system

8. Demand Management Techniques
Aggregating and disaggregating forecasts
Make to stock demand management
Assemble-to-order demand management
Make-to-order demand management (engineer-to-order)

9. Managing Demand Organizing for demand management
Monitoring the demand management system
Balancing supply and demand

10. Jacobs et al: Chapter 3
Forecasting

11. Forecasting Defined
Forecasting is the process of making statements, estimation, or predictions about events or some variable of interest at some specified future date whose actual outcomes have not yet been observed.

12. Providing appropriate Forecast Information
Forecasting for strategic business planning
Forecasting for sales and operation planning
Forecasting for master production scheduling and control

13. Basic Forecasting Techniques
Causal/econometric methods
Time (trend) series
Judgmental methods
Other methods

14. Causal/Econometric Methods
Regression analysis using linear regression or non-linear regression
Autoregressive moving average (ARMA)
Autoregressive integrated moving average (ARIMA)
Econometrics

15. Regression analysis includes any techniques for modeling and analyzing several variables, when the focus is on the relationship between a dependent variable and one or more independent variables.
Regression analysis helps one understand how the typical value of the dependent variable changes when any one of the independent variables is varied, while the other independent variables are held fixed

16. Regression Analysis

17. Time series Moving average Basic exponential smoothing model
Trend enhancement of the basic exponential smoothing
Seasonal enhancement of the basic exponential smoothing
Extrapolation
Linear prediction
Trend estimation
Growth curve

18. Time Series
Elapsed Time (s)
"Speed" (ms−1) 1 3 2 7 12 4 20 5 30 6 45

19. Forecasted Monthly Sales

20. Judgmental methods Composite forecasts Surveys Delphi method
Scenario building
Technology forecasting
Forecast by analogy

21. Moving Average
A moving average is a set of numbers, each of which is the average of the corresponding subset of a larger set of data points.

22. Moving Average Example
For sales during six periods:
Period 1 = $10000
Period 2 = $12000
Period 3 = $9000
Period 4 = $11000
Period 5 = $9600
Period 6 = $12100

23. Moving Average Example
Sales for period 7 would be the average of the previous six periods: Or =
$10617

24. Trend enhancement of the basic exponential smoothing
Forecasting technique that uses a weighted moving average of past data as the basis for a forecast.
The procedure gives heaviest weight to more recent information and smaller weight to observations in the more distant past.
The reason for this is that the future may be more dependent upon the recent past than on the distant past.
The method is effective when there is random demand and no seasonal fluctuations in the data.

25. Trend enhancement of the basic exponential smoothing

26. Trend enhancement of the basic exponential smoothing
New Forecast =
Old Forecast + α (Actual - Old Forecast)

27. Trend enhancement of the basic exponential smoothing
ESFt-1 + (actual demandt - ESFt-1)

28. Trend enhancement of the basic exponential smoothing
TEFt = Base valuet-1 + Trendt-1
Base value = (actual demandt) +(1 – ) (Base valuet-1 + Trendt-1)
Trendt = (base valuet – base valuet-1) + (1 – )(Trendt-1)
 = Base value smoothing constant
 = trend smoothing constant
t = current time

29. Other forecasting methods
Simulation
Prediction market
Probabilistic forecasting

30. Probabilistic Forecasting
The probability of event A is the number of ways event A can occur divided by the total number of possible outcomes. It is expressed as:
P(A) =
 The Number of Ways Event A Can Occur  
The Total Number of Possible Outcomes
Requires knowledge of theorems of probability

31. Inventory Models Economic order quantity (EOQ)
Computerized inventory control systems
Manual inventory system

32. EOQ
An inventory-related equation that determines the optimum order quantity that a company should hold in its inventory given a set cost of production, demand rate and other variables.
This is done to minimize variable inventory costs. 
The full equation is as follows:   Where :  S = Setup costs D = Demand rate P = Production cost  I = Interest rate  

33. Worker-Orienetd Values: Honesty, Self-Control, and Self-Respect
Obi, Chapter 3
Worker-Orienetd Values: Honesty, Self-Control, and Self-Respect

34. Honesty Truthfulness Sincerity Upright conduct Upright disposition
Publishers Clearing House example

35. Ramifications of Workplace Honesty

36. Areas of Workplace Dishonesty

37. Self-Control Self-control = Self-restraint
A worker’s ability to manage his or her own actions, desires, or motions.
Ability to hold back one’s self from some actions, desires or emotions that are most often experienced in the work place

38. Common Areas of Self-Control

39. Some Consequences of Lack of Self-Control in the Workplace

40. Self-Respect
Having proper regard for one’s own person, character, or reputation.
Due respect for oneself.

41. Some Areas of Self-Respect