Steps Inwards Production Forecasting Process

Steps inward Production Forecasting Process

Steps inward a production forecasting procedure are depicted inward the ikon below.

Image Credits © Luna Rodriguez.

The stages or steps inward a production forecasting procedure are listed every bit follows:

1. Fix the forecasting objectives.
2. Decide what to forecast?
3. Determine the fourth dimension frame.
4. Collect the information for forecasting.
5. Select the forecasting model
6. Build together with examination the forecasting model.
7. Prepare the forecasts.
8. Prepare the forecasts.
9. Compare events alongside the forecasts.

Now let's speak over each pace of production forecasting procedure i yesteryear one.

1. Fix the forecasting objectives

The production director must showtime cook 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 reply to this interrogation may be; nosotros are doing forecasting to help us inward marketing planning, or nosotros are doing forecasting to help us inward the constitute capacity planning, etc. If nosotros know precisely why nosotros are forecasting, together with thence nosotros tin laissez passer on the sack collect proper information for that purpose. This volition effect inward to a greater extent than accurate forecasting.

2. Decide what to forecast?

After finding out why to forecasts, the production director must reply the question, what to forecast? That is, are nosotros forecasting the book of production, value of sales, the amount of finance required, set out of workers required for futurity production together with thence on. The production director must determine the units of measuring such every bit volume, value, etc. for forecasting.

3. Determine the fourth dimension frame

The production director together with thence fixes or determine the fourth dimension frame for the production forecast. That is, he must reply the question, for what current are nosotros making a forecast? In other words, whether the forecast is made for a week, a month, 3 months, vi months, i twelvemonth or more.

4. Collect the information for forecasting

The production director must cook the database. That is, he must determine from where he volition collect the information for forecasting. In other words, he must determine whether to collect information from internal sources or external sources. He must too determine whether to work quantitative information or qualitative data. So, inward this 4th step, the production director decides nigh the type of information which he volition work for forecasting.

5. Select the forecasting model

In this step, the production director must determine the method or model of forecasting which he volition use. There are many methods of forecasting. There are qualitative together with quantitative methods. The qualitative methods such every bit Nominal Group Technique, Delphi technique, etc. are to a greater extent than suitable for novel products. However, for existing products, alongside stable demand, quantitative methods such every bit Simple Moving Average Technique should move used.

6. Build together with examination the forecasting model

In this step, the production director uses a role 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 role of the information to examination the model. That is, he volition apply the formula together with run across whether it gives the accurate reply 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 director must railroad train the forecasts for a specific current for the exceptional product. The current may move weekly, monthly, etc.

8. Present the forecasts

In this step, the production director gives or presents the forecasts to those who volition work it. He must too render 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 alongside the forecasts

Here, inward this end step, the actual events or functioning is compared alongside the forecasts. The deviations are corrected, wherever possible or the forecasts are modified.