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Forecasting Presentation


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Forecasting Presentation

  1. 1. FORECASTING AT ROSS PRODUCTS By: Ravi Kanudawala (3905139) Mayur Somaiya (3905128) Ajay Raval (3905225)
  2. 2. FORECASTING  Forecasting is the process of making statements about events whose actual outcomes (typically) have not yet been observed. For example, it might be estimation for some variable of interest at some specified value date.  Forecasting is used in the practice of Customer Demand Planning in every day business forecasting for manufacturing companies.
  3. 3. TYPES OF FORECASTING  Quantitative forecasting  Naïve forecasting Approach Time Series Forecasting methods  Causal / econometric forecasting methods Judgmental forecasting methods Artificial Intelligence forecasting methods
  4. 4. REGRESSION ANALYSIS  The Regression Analysis is part of Causal / econometric forecasting methods. It includes a large group of methods that can be used to predict future values of a variable using information about other variables.
  5. 5. STRATEGIC BUSINESS PLANNING  Level of aggregation  Total sales or output volume  Top Management involvement  intensive  Forecast frequency  Annual or less  Length of forecast  Year by years or quarters  Usual techniques  Management judgment, regression.
  6. 6. SALES AND OPERATIONS PLANNING  Level of aggregation  Product family units  Top Management involvement  When reconciling functional plans or moderate  Forecast frequency  Monthly to quarterly  Length of forecast  Several months to a year by months  Usual techniques  Aggregation of detailed forecasts, customer plans
  7. 7. MASTER PRODUCTION SCHEDULING AND CONTROL  Level of aggregation  Individual finished goods or components  Top Management involvement  Very little or Minimal  Forecast frequency  Constantly  Length of forecast  A few days to weeks  Usual techniques  Projection techniques (smoothing, moving average)
  8. 8. INTRODUCTION  The Ross Products is division of Abbott laboratories and is situated in Columbus , Ohio.  It produces a variety of nutritional products including adult medical nutrition supplements, pediatric infant formulas, as well as ancillary equipment.  For example, pump which supplies nutritional liquids to the stomach.  Mainly there are four manufacturing facilities in US.  Ross markets its products in United States and Overseas.  They using log*plus program to perform demand management activities. Log*plus produces forecasts from nation inputs and monitors actual demands against these forecasts.
  9. 9. PROCEDURE Marketing and sales forecasts by products groups Vendor-managed inventory EDI Demand Management Other Customers Orders Breakout of national forecast by plant International Forecast Forecast consolidation and conversion ( to SKU by plant) Meeting for revising the forecast Forecast available for manufacturing Planning Meeting for forecast review
  10. 10. Values of Dependent Variable Actual observation Deviation Deviation Deviation Deviation Deviation Deviation Deviation ˆ Y a bx Time Point on regression line
  11. 11. LINEAR TREND PROJECTION  Used for forecasting linear trend line Yi a bX i  Assumes relationship between response variable, Y, and time, X, is a linear function
  12. 12. LINEAR REGRESSION EQUATIONS Equation: ˆ Yi a bxi n Slope: b x i yi i 1 n i 1 Y-Intercept: a x i2 y bx nx y nx 2