PRESENTED BY: AMNA SAFDAR ALI 1
Q. 1 a)Justify that operations management is a multi disciplinary
function with relevant examples.
b) Organizations must focus on the social issues. You are
advised to highlight the social issues involved in operation
management and suggest possible measures.
A) OPERATIONS MANAGEMENT
Operations management focuses on carefully managing the processes to
produce and distribute products and services. Major, overall activities often
include product creation, development, production and distribution. (These
activities are also associated with Product and Service Management) Related
activities include managing purchases, inventory control, quality control,
storage, logistics and evaluations of processes. A great deal of focus is on
efficiency and effectiveness of processes. Therefore, operations
management often includes substantial measurement and analysis of
internal processes. Ultimately, the nature of how operations management is
carried out in an organization depends very much on the nature of the
products or services in the organization, for example, on retail,
manufacturing or wholesale.
MULTI DISCIPLINARY FUNCTION
Purchasing
Control and Coordinating Function of Management
Product and Service Management
Quality Management
Inventory Management
Supply Chain Management
Logistics and Transportation Management
Facilities Management
Configuration Management
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Distribution Channels
Enterprise Resource Planning
PROCUREMENT (PURCHASING) PRACTICES
This topic reviews guidelines for buying various materials from suppliers and
vendors materials, including computers, services from lawyers, insurance,
etc.
MANAGEMENT CONTROL AND COORDINATING FUNCTION
Management control and coordination includes a broad range of activities to
ensure that organizational goals are consistently being met in an effective
and efficient fashion.
PRODUCT AND SERVICE MANAGEMENT
As noted above, the major activities involved in product and service
management are similar to those in operations management. However,
operations management is focused on the operations of the entire
organization, rather than managing a product or service.
QUALITY MANAGEMENT
Quality management is crucial to effective operations management,
particularly continuous improvement. More recent advancements in quality,
such as benchmarking and Total Quality Management, have resulted in
advancements to operations management as well.
INVENTORY MANAGEMENT
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Costs can be substantial to store and move inventory. Innovative methods,
such as Just-in-Time inventory control, can save costs and move products
and services to customers more quickly.
LOGISTICS AND TRANSPORTATION MANAGEMENT
Logistics is focused on the flow of materials and goods from suppliers,
through the organization and to the customers, with priority on efficiency
and cost effectiveness.
FACILITIES MANAGEMENT
Effective operations management depends a great deal on effective
management of facilities, such as buildings, computer systems, signage,
lighting, etc.
CONFIGURATION MANAGEMENT
It's important to track the various versions of products and services.
Consider the various versions of software that continually are produced, each
with its own version number. Tracking these versions is configuration
management.
B) SOCIAL ISSUES INVOLVED IN OPERATION MANAGEMENT
Perhaps the most practical approach is to view ethics as a catalyst that
causes managers to take socially responsible actions. The movement toward
including ethics as a critical part of management education began in the
1970s, grew significantly in the 1980s, and is expected to continue growing.
Hence, business ethics is a critical component of business leadership. Ethics
can be defined as our concern for good behavior. We feel an obligation to
consider not only our own personal well-being but also that of other human
beings. This is similar to the precept of the Golden Rule: Do unto others as
you would have them do unto you. In business, ethics can be defined as the
ability and willingness to reflect on values in the course of the organization's
Operation Management (5568)
PRESENTED BY: AMNA SAFDAR ALI 4
decision-making process, to determine how values and decisions affect the
various stakeholder groups, and to establish how managers can use these
precepts in day-to-day company operations. Ethical business leaders strive
for fairness and justice within the confines of sound management practices.
SOCIAL RESPONSIBILITY
The term social responsibility means different things to different people.
Generally, corporate social responsibility is the obligation to take action that
protects and improves the welfare of society as a whole as well as
organizational interests. According to the concept of corporate social
responsibility, a manager must strive to achieve both organizational and
societal goals.
Current perspectives regarding the fundamentals of social responsibility of
businesses are listed and discussed through the Davis model of corporate
social responsibility, areas of corporate social responsibility, and varying
opinions on social responsibility.
A model of corporate social responsibility that was developed by Keith Davis
provides five propositions that describe why and how businesses should
adhere to the obligation to take action that protects and improves the
welfare of society and the organization:
Proposition 1: Social responsibility arises from social power.
Proposition 2: Business shall operate as an open system, with open
receipt of inputs from society and open disclosure of its operation to
the public.
Proposition 3: The social costs and benefits of an activity, product, or
service shall be thoroughly calculated and considered in deciding
whether to proceed with it.
Proposition 4: Social costs related to each activity, product, or service
shall be passed on to the consumer.
Proposition 5: Business institutions, as citizens, have the responsibility
to become involved in certain social problems that are outside their
normal areas of operation.
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The areas in which business can become involved to protect and improve the
welfare of society are numerous and diverse. Some of the most publicized of
these areas are urban affairs, consumer affairs, environmental affairs, and
employment practices. Although numerous businesses are involved in
socially responsible activities, much controversy persists about whether such
involvement is necessary or appropriate. There are several arguments for
and against businesses performing socially responsible activities.
SOCIAL RESPONSIVENESS
Social responsiveness is the degree of effectiveness and efficiency an
organization displays in pursuing its social responsibilities. The greater the
degree of effectiveness and efficiency, the more socially responsive the
organization is said to be. The socially responsive organization that is both
effective and efficient meets its social responsibilities without wasting
organizational resources in the process. Determining exactly which social
responsibilities an organization should pursue and then deciding how to
pursue them are perhaps the two most critical decision-making aspects of
maintaining a high level of social responsiveness within an organization. That
is, managers must decide whether their organization should undertake the
activities on its own or acquire the help of outsiders with more expertise in
the area.
In addition to decision making, various approaches to meeting social
obligations are another determinant of an organization's level of social
responsiveness. A desirable and socially responsive approach to meeting
social obligations involves the following:
Incorporating social goals into the annual planning process
Seeking comparative industry norms for social programs
Presenting reports to organization members, the board of directors,
and stockholders on progress in social responsibility
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Experimenting with different approaches for measuring social
performance
Attempting to measure the cost of social programs as well as the
return on social program investments
The social obligation approach, for example, considers business as having
primarily economic purposes and confines social responsibility activity
mainly to conformance to existing laws. The socially responsible approach
sees business as having both economic and societal goals. The social
responsiveness approach considers business as having both societal and
economic goals as well as the obligation to anticipate upcoming social
problems and to work actively to prevent their appearance.
AREAS OF MEASUREMENT
To be consistent, measurements to gauge organizational progress in
reaching socially responsible objectives can be performed. The specific areas
in which individual companies actually take such measurements vary, of
course, depending on the specific objectives of the companies. All
companies, however, probably should take such measurements in at least
the following four major areas:
1. Economic function: This measurement gives some indication of the
economic contribution the organization is making to society.
2. Quality-of-life: The measurement of quality of life should focus on
whether the organization is improving or degrading the general quality
of life in society.
3. Social investment: The measurement of social investment deals with
the degree to which the organization is investing both money and
human resources to solve community social problems.
4. Problem-solving: The measurement of problem solving should focus on
the degree to which the organization deals with social problems.
Operation Management (5568)
PRESENTED BY: AMNA SAFDAR ALI 7
Q. 2 Describe the working of production systems like FMS, GT,
and OPT in different organizational settings.
PRODUCTION SYSTEM
The practical expression of Toyota's people and customer-oriented
philosophy is known as the Toyota Production System (TPS). This is not a
rigid company-imposed procedure but a set of principles that have been
proven in day-to-day practice over many years. Many of these ideas have
been adopted and imitated all over the world.
TPS has three desired outcomes:
To provide the customer with the highest quality vehicles, at lowest
possible cost, in a timely manner with the shortest possible lead times.
To provide members with work satisfaction, job security and fair
treatment.
It gives the company flexibility to respond to the market, achieve profit
through cost reduction activities and long-term prosperity.
TPS strives for the absolute elimination of waste, overburden and
unevenness in all areas to allow members to work smoothly and efficiently.
The foundations of TPS are built on standardization to ensure a safe method
of operation and a consistent approach to quality. Toyota members seek to
continually improve their standard processes and procedures in order to
ensure maximum quality, improve efficiency and eliminate waste. This is
known as kaizen and is applied to every sphere of the company's activities.
CONTINUOUS IMPROVEMENT
Like all mass-production systems, the Toyota process requires that all tasks,
both human and mechanical, be very precisely defined and standardized to
ensure maximum quality, eliminate waste and improve efficiency.
Operation Management (5568)
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Toyota Members have a responsibility not only to follow closely these
standardized work guidelines but also to seek their continual improvement.
This is simply common sense - since it is clear that inherent inefficiencies or
problems in any procedure will always be most apparent to those closest to
the process.
The day-to-day improvements that Members and their Team Leaders make
to their working practices and equipment are known as kaizen. But the term
also has a wider meeting: it means a continual striving for improvement in
every sphere of the Company's activities - from the most basic
manufacturing process to serving the customer and the wider community
beyond.
JUST IN TIME
It is perhaps not widely known that the 'just in time' approach to production
that has now gained almost universal acceptance in world manufacturing
was actually pioneered by Toyota. In fact, a Toyota engineer coined the term
itself.
This, too, is a simple but inspired application of common sense.
Essentially, 'just in time' manufacturing consists of allowing the entire
production process to be regulated by the natural laws of supply and
demand.
Customer demand stimulates production of a vehicle. In turn the production
of the vehicle stimulates production and delivery of the necessary parts and
so on.
The result is that the right parts and materials are manufactured and
provided in the exact amount needed - and when and where they are
needed.
SUPPLIERS & TPS
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Just-in-time manufacturing and other elements of the Toyota Production
System work best when they are a common basis for synchronizing activity
throughout the production sequence. This is an egalitarian arrangement in
which each process in the production flow becomes the customer for the
preceding process and each process becomes a supermarket to the following
process.
Independent suppliers participate on an equal footing with Toyota operations
in the production flow, each fulfilling their own role in that flow.
The only participant in the entire sequence who does not answer to anyone
is the customer who selects a vehicle in the marketplace.
Suppliers who participate in the Toyota Production System enjoy the same
benefits that Toyota does from the system. Just-in-time manufacturing can
dissolve inventories at parts suppliers just as readily and effectively as it
does at Toyota's assembly plants. Product quality improves, too. That's
because the Toyota Production System includes measures for illuminating
defects whenever and wherever they occur.
Suppliers who adopt the Toyota Production System also report improvements
in employee-management relations. That is mainly because the system
provides for an expanded role for employees in designing and managing
their own work. It brings together employees and management in the joint
pursuit of improvements in productivity, quality, and working conditions.
FLEXIBLE MANUFACTURING SYSTEM (FMS)
.
A flexible manufacturing system (FMS) is a manufacturing system in which
there is some amount of flexibility that allows the system to react in the case
of changes, whether predicted or unpredicted. This flexibility is generally
considered to fall into two categories, which both contain numerous
subcategories.
The first category, machine flexibility, covers the system's ability to be
changed to produce new product types, and ability to change the order of
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operations executed on a part. The second category is called routing
flexibility, which consists of the ability to use multiple machines to perform
the same operation on a part, as well as the system's ability to absorb large-
scale changes, such as in volume, capacity, or capability.
ADVANTAGES
1. Reduced manufacturing times,
2. Lower cost per unit produced,
3. Greater labor productivity,
4. Greater machine efficiency,
5. Improved quality,
6. Increased system reliability,
7. Reduced parts inventories,
8. Adaptability to CAD/CAM operations.
DISADVANTAGES
1. Cost to implement,
2. Substantial pre-planning required,
INDUSTRIAL FMS COMMUNICATION
Training FMS with learning robot SCORBOT-ER 4u, workbench CNC Mill and
CNC Lathe
An Industrial Flexible Manufacturing System (FMS) consists of robots,
Computer-controlled Machines, Numerical controlled machines (CNC),
instrumentation devices, computers, sensors, and other stand alone systems
such as inspection machines. The use of robots in the production segment of
manufacturing industries promises a variety of benefits ranging from high
utilization to high volume of productivity. Each Robotic cell or node will be
located along a material handling system such as a conveyor or automatic
guided vehicle. The production of each part or work-piece will require a
different combination of manufacturing nodes..
Operation Management (5568)
PRESENTED BY: AMNA SAFDAR ALI 11
GROUP TECHNOLOGY
The complexity of products is constantly increasing. To meet the world's
growing demand on diversity, highly differentiating products are required.
This as well as historically grown product programs lead to changing product
structures with a high number of variations in products and processes. In
general the huge diversity of parts and processes that alternatively
combines with the lack of transparency and product- and manufacturing
process-related information is the outcome. Here group technology can
make a contribution to identify similarities and patterns of objects and
processes. A huge number of different methods cover a wide range of
applications in nearly all branches of production.
The main field of application of group technology can be characterized as
follows:
Finding similar work pieces or similar manufacturing sequences with
respect to function, design and manufacturing criterias,
Standardization and structuring of similar business processes,
Solving of similar industrial engineering problems.
Q. 3 Identify the quality cost elements associated with the
institutions listed below. Define each of these elements and
suggest how each might be quantified in practice?
A university
A Hospital
A Bank
The Local Bus Line
A text book Publisher
A manufacturer of men’s shoes
QUALITY COST ELEMENTS ASSOCIATED WITH A TEXT UNIVERSITY
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A University is a manual of instruction in any branch of study. University are
produced according to the demands of educational institutions. Quality cost
elements of a university are given below:
Teaching staff
Building
Area
Facilities
Recommended books
Course offerings
Above are the quality cost elements of a university that can describe the
quality of a university. The University market does not operate in exactly the
same manner as most consumer markets. First, the end consumers
(students) do not select the product, and the product is not purchased by
faculty or professors. Therefore, price is removed from the purchasing
decision, giving the producer (publishers) disproportionate market power to
set prices high. Similarities are found in the pharmaceutical industry, which
sells its wares to doctors, rather than the ultimate end-user (i.e. patient).
This fundamental difference in the market is often cited as the primary
reason that prices are out of control. The term "Broken Market" first
appeared in Economist James Koch's analysis of the market commissioned
by the Advisory Committee on Student Financial Assistance.
This situation is exacerbated by the lack of competition in the textbook
market. Consolidation in the past few decades has reduced the number of
major textbook companies from around 30 to just a handful. Consequently,
there is less competition than there used to be, and the high cost of starting
up keeps new companies from entering.
QUALITY COST ELEMENTS ASSOCIATED WITH HOSPITAL
Quality cost elements of a hospital are following under:
Location
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Qualified Staff
Maintenance
Facilities
Latest Equipments
Location: of a hospital are very much important and basic factor to describe
the quality matters of hospital because good quality hospitals select the
location that will be best as environment and all other aspects.
Qualified Staff: plays vital role to describe the quality of any institution and
organization. In the case of Hospital if nominate and qualified staff will be
there the quality line will be increase.
Maintenance: Maintenance is also very important factor to describe the
quality of any organization. If organization maintains every thing in the best
condition it will impact on the overall quality reputation of the hospital.
Facilities: are another important issue in the case of hospital. There are
many kind of hospitals provide many kind of facilities but good private
hospital provide extra facilities to the patients that is symbol of their quality
maintenance.
Equipments: Latest and modern equipments also very necessary for a
hospital to describe the quality of a hospital. If there will be latest and good
condition equipment in the hospital it will create the good impact regarding
quality to the customers.
This assignment will summarizes the findings from a study of the ingredients
that contribute to excellence in hospital quality. The Economic and Social
Research Institute (ESRI) 2 has combined quantitative research with case
studies and telephone interviews to develop a typology of the key factors
driving the achievement of good results and successful quality improvement
(QI) efforts in hospital care.
QUALITY COST ELEMENTS ASSOCIATED WITH BANKS
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Amid sweeping regulatory change, slow economic growth and tightened
margins, banks today are increasingly focused on their most important
stakeholders — their customers.
Yet, despite their best efforts to attract and retain customers, customer
confidence levels in banks remain low.
In response, customers are changing their behavior and demanding lower
fees for higher levels of service or other improvements. If these demands are
not met, they are increasingly likely to shop around at other banks for
competitive rates for services and products.
To build on our previous global consumer banking survey in 2011, and to
help banks better understand what they must do to build and maintain
customer relationships, we surveyed 28,560 banking customers across 35
countries to learn more about their needs and preferences. Our banking
teams around the world analyzed the responses.
We hope the data and survey findings are useful to you when planning
strategies and adapting your business models to attain greater customer
loyalty and satisfaction.
SURVEY SUGGESTS THAT FOR BANKS TO REMAIN COMPETITIVE,
THEY MUST:
Give customers the opportunity to choose by making promises and
service offers more transparent.
Rebalance fee structures to achieve the clarity and sustainability
required by regulators and investors.
Help customers shape their own banking experiences by improving
how they provide information and advice, recruiting online affinity
groups and by developing flexible loyalty programs.
Develop models around customer needs by reprioritizing spending,
including increasing the use of low-cost digital models and using more
innovative technology.
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COMFORT AND CONVENIENCE
How long is the walk? Can one walk safely along and across the
streets to and from transit stops? Is there a functional and continuous
accessible path to the stop, and is the stop accessible to people with
disabilities?
Is the service reliable?
How long is the wait? Is shelter available at the stop while waiting?
How comfortable is the trip? Will one have to stand? Are there an
adequate number of spaces?
How much will the trip cost?
How many transfers are required?
How long will the trip take in total? How long relative to other modes?
Are the vehicles and facilities clean?
SERVICE DELIVERY
Reliability: how often is the service provided as promised?
Customer service: what is the quality of direct contacts between
passengers and staff and more importantly, the customers’ overall
perception of service quality?
Comfort: what is the passengers’ physical comfort level as they wait
for and use transit service?
SAFETY AND SECURITY
This relates to the likelihood or more importantly perceived likelihood that
one will be involved in an accident (safety) or become the victim of a crime
(security) while using public transport. An example question in this category:
Are there security concerns—walking, waiting, or in the vehicle?
QUALITY COST ELEMENTS ASSOCIATED WITH THE LOCAL BUS LINE
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When we consider public transport, except for particular specialized services
and first class services on rail networks, passengers do not generally have
the option of purchasing an additional quality element. The practice thus far
in public transportation planning and management is that conventional
planning tends to overlook service quality impacts.
With regards to the choice market, the public transport provision has to be
competitive against the private car in meeting travelling needs of the user.
As an example given in Litman (2008), car owners have the option and are
often willing to pay considerable sums to include a variety of “optional
extras” such as satellite navigation systems, leather interiors in the car.
Whilst the basic need of the car owner is a means of provision of
transportation from point A to point B, the quality elements and more
importantly the image associated with ownership and use of this car is
clearly an element of importance in the decision making process of car
ownership and purchase. If more car users are to be persuaded to choose
the option of public transport instead, the entire package of public transport
options available has to be improved considerably. When approaching this
group, the objective of quality is designed to entice these choice users by
ensuring that public transport caters both to their basic transportation needs
and also to their implied needs.
For them, public transport needs to deliver at least a journey experience
rivalling that, or better than, the private car. Hence measures improving the
image of public transport, enhancing safety and personal security, reducing
overcrowding are targeted at this segment of the market.
QUALITY COST ELEMENTS ASSOCIATED WITH A TEXT BOOK
PUBLISHER
A textbook or course book is a manual of instruction in any branch of
study. Textbooks are produced according to the demands of educational
institutions. Although most textbooks are only published in printed format,
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many are now available as online electronic books and increasingly, although
illegally, in scanned format in P2P networks.
The textbook market does not operate in exactly the same manner as most
consumer markets. First, the end consumers (students) do not select the
product, and the product is not purchased by faculty or professors.
Therefore, price is removed from the purchasing decision, giving the
producer (publishers) disproportionate market power to set prices high.
Similarities are found in the pharmaceutical industry, which sells its wares to
doctors, rather than the ultimate end-user (i.e. patient).
This fundamental difference in the market is often cited as the primary
reason that prices are out of control. The term "Broken Market" first
appeared in Economist James Koch's analysis of the market commissioned
by the Advisory Committee on Student Financial Assistance.
This situation is exacerbated by the lack of competition in the textbook
market. Consolidation in the past few decades has reduced the number of
major textbook companies from around 30 to just a handful. Consequently,
there is less competition than there used to be, and the high cost of starting
up keeps new companies from entering.
QUALITY COST ELEMENTS ASSOCIATED WITH MANUFACTURER OF
MEN’S SHOWS
Quality Cost elements of a show company
According to trend
Making Quality
Material used
Designing
Advertising
Pricing Strategy
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According to Trend: Product should be according to the latest trend used
in the society, Show Company has to follow the latest trends in the society
and then design the show.
Quality: Quality of shows should be acceptable for the consumers according
to their use of shows.
Material Used: Company should use the quality material during making of
men’s shows.
Designing: Designing should be according to the demand of consumers and
time to time company should introduce the new designs in the market.
Advertising: Advertising is very important for the quality maintenance of
any product in these days. High quality adds would be create good quality
impacts on the consumer mind.
Pricing: Pricing of product should be according to the market trend this will
also increase the quality of your product.
Q. 4 In a stock company, marketing department makes a sales forecast each
year by developing a sales force composite. Meanwhile, operations
make a sales forecast based on past experience and trends. The
operation forecast usually turn out to be an increase over last year but
still 20 percent less than the forecast of marketing department. How
should forecasting in the company be done?
FORECASTING
Forecasting is the process of making statements about events whose actual
outcomes (typically) have not yet been observed. A commonplace example
might be estimation of some variable of interest at some specified future
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date. Prediction is a similar, but more general term. Both might refer to
formal statistical methods employing time series, cross-sectional or
longitudinal data, or alternatively to less formal judge mental methods.
Usage can differ between areas of application: for example, in hydrology, the
terms "forecast" and "forecasting" are sometimes reserved for estimates of
values at certain specific future times, while the term "prediction" is used for
more general estimates, such as the number of times floods will occur over a
long period.
Risk and uncertainty are central to forecasting and prediction; it is generally
considered good practice to indicate the degree of uncertainty attaching to
forecasts. In any case, the data must be up to date in order for the forecast
to be as accurate as possible.[1]
Although quantitative analysis can be very precise, it is not always
appropriate. Some experts in the field of forecasting have advised against
the use of mean square error to compare forecasting methods
CATEGORIES OF FORECASTING METHODS
QUALITATIVE VS QUANTITATIVE METHODS
Qualitative forecasting techniques are subjective, based on the opinion and
judgment of consumers, experts; appropriate when past data is not
available. It is usually applied to intermediate-long range decisions.
Examples of qualitative forecasting methods are informed opinion and
judgment, the Delphi method, market research, historical life-cycle analogy.
Quantitative forecasting models are used to estimate future demands as a
function of past data; appropriate when past data are available. The method
is usually applied to short-intermediate range decisions. Examples of
quantitative forecasting methods are:[citation needed] last period demand, simple
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and weighted moving averages (N-Period), simple exponential smoothing,
multiplicative seasonal indexes.
REFERENCE CLASS FORECASTING
Reference class forecasting was developed by Oxford professor Bent
Flyvbjerg to eliminate or reduce bias in forecasting by focusing on
distributional information about past, similar outcomes to that being
forecasted. Daniel Kahneman, Nobel Prize winner in economics, calls
Flyvbjerg's counsel to use reference class forecasting to de-bias forecasts,
"the single most important piece of advice regarding how to increase
accuracy in forecasting.
TIME SERIES METHODS
Time series methods use historical data as the basis of estimating future
outcomes.
Moving average
Weighted moving average
Kalman filtering
Exponential smoothing
Autoregressive moving average (ARMA)
Autoregressive integrated moving average (ARIMA)
CAUSAL / ECONOMETRIC FORECASTING METHODS
Some forecasting methods use the assumption that it is possible to identify
the underlying factors that might influence the variable that is being
forecast. For example, including information about weather conditions might
improve the ability of a model to predict umbrella sales. This is a model of
seasonality which shows a regular pattern of up and down fluctuations. In
addition to weather, seasonality can also be due to holidays and customs
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such as predicting that sales in college football apparel will be higher during
football season as opposed to the off season. Casual forecasting methods are
also subject to the discretion of the forecaster. There are several informal
methods which do not have strict algorithms, but rather modest and
unstructured guidance. One can forecast based on, for example, linear
relationships. If one variable is linearly related to the other for a long enough
period of time, it may be beneficial to predict such a relationship in the
future. This is quite different from the aforementioned model of seasonality
whose graph would more closely resemble a sine or cosine wave. The most
important factor when performing this operation is using concrete and
substantiated data. Forecasting off of another forecast produces inconclusive
and possibly erroneous results.
ARTIFICIAL INTELLIGENCE METHODS
Artificial neural networks
Group method of data handling
Support vector machines
Often these are done today by specialized programs loosely labeled
Data mining
OTHER METHODS
Simulation
Prediction market
Probabilistic forecasting and Ensemble forecasting
Business forecasters and practitioners sometimes use different terminology
in the industry. They refer to the PMAD as the MAPE, although they compute
this as a volume weighted MAPE For more information see Calculating
demand forecast accuracy.
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Reference class forecasting was developed to increase forecasting accuracy
by framing the forecasting problem so as to take into account available
distributional information. Daniel Kahneman, winner of the Nobel Prize in
economics, calls the use of reference class forecasting "the single most
important piece of advice regarding how to increase accuracy in forecasting.
Forecasting accuracy, in contrary to belief, cannot be increased by the
addition of experts in the subject area relevant to the phenomenon to be
forecast.
APPLICATIONS OF FORECASTING
The process of climate change and increasing energy prices has led to the
usage of Egan Forecasting of buildings. The method uses forecasting to
reduce the energy needed to heat the building, thus reducing the emission
of greenhouse gases. Forecasting is used in the practice of Customer
Demand Planning in everyday business forecasting for manufacturing
companies. Forecasting has also been used to predict the development of
conflict situations. Experts in forecasting perform research that use empirical
results to gauge the effectiveness of certain forecasting models. Research
has shown that there is little difference between the accuracy of forecasts
performed by experts knowledgeable of the conflict situation of interest and
that performed by individuals who knew much less.
Similarly, experts in some studies argue that role thinking does not
contribute to the accuracy of the forecast. The discipline of demand
planning, also sometimes referred to as supply chain forecasting, embraces
both statistical forecasting and a consensus process. An important, albeit
often ignored aspect of forecasting, is the relationship it holds with planning.
Forecasting can be described as predicting what the future will look like,
whereas planning predicts what the future should look like. There is no single
right forecasting method to use. Selection of a method should be based on
your objectives and your conditions (data etc.). A good place to find a
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method, is by visiting a selection tree. An example of a selection tree can be
found here. Forecasting has application in many situations:
LIMITATIONS
As proposed by Edward Lorenz in 1963, long range weather forecasts, those
made at a range of two weeks or more, are impossible to definitively predict
the state of the atmosphere, owing to the chaotic nature of the fluid
dynamics equations involved. Extremely small errors in the initial input, such
as temperatures and winds, within numerical models doubles every five
days.
Q. 5 a) What relationship exists between layout decisions, capacity
decisions, and scheduling?
b) Compare the manual and quantitative models for process layout
design. What could be the advantages of each of the model?
A) MAKING POPULAR LAYOUT DECISIONS
You’re a Web designer, right? You fascist oppressor. What gives you the right
to be so arrogant and close-minded?
Amazing, isn’t it? We’ve only just met and here I am insulting and berating
you. And you don’t even know why, though you might have some idea.
Let me clear it up for you: in your last three design projects, you excluded
visitors, ran roughshod over user expectations, and generally displayed a
lack of understanding of the medium. This is the case no matter what design
techniques you used; no matter whose books you read; no matter what you
did. You thug.
What the blinking font am I talking about? I’m talking about Web design,
which requires a constant balancing of pros and cons, and which does not
admit to universally applicable answers. Unfortunately, this means that when
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you make a choice in how to style your site, you’re going to annoy
somebody. Change that decision, and you’ll annoy somebody different.
Let’s take the eternal debate of fixed versus liquid (or fluid or elastic or jello
or whatever term you prefer) layout. On the one hand, you have the ability
to set your design layout at a fixed width, using pixels or ems or some other
fixed unit of measure. This has the advantage of giving you a more-or-less
controlled design space, and as a bonus can help overcome some annoying
positioning bugs in IE/Win. On the down side, if a user has a really wide
browser window, then there’s a whole bunch of white space to the sides of
the design’s content; alternatively, a very narrow browser window will invoke
the dreaded horizontal scrollbar (eeeek!).
The other choice is to go fluid (or liquid or whatever), using mainly
percentages to define the widths of layout areas. The win here is that your
content will always fill the browser window, or at least some portion of it,
regardless of that window’s width. No ugly leftover whitespace! On the other
hand, users with really wide windows will get really long lines of text, which
most people find difficult to read; at the other end, a really narrow window
can mean single-word lines of text or, worse, some content overlapping other
content.
CAPACITY DECISIONS
He Psychiatric Consultation Service at Massachusetts General Hospital (MGH)
sees medical and surgical inpatients with comorbid psychiatric symptoms
and conditions. Such consultations require the integration of medical and
psychiatric knowledge. During their thrice-weekly rounds, Dr. Huffman and
Dr. Stern discuss the diagnosis and management of conditions confronted.
These discussions have given rise to rounds reports that will prove useful for
clinicians practicing at the interface of medicine and psychiatry.
One of the most common reasons for a psychiatric consultation in the
general hospital is to help decide whether a patient has the clarity of mind to
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agree to or refuse a treatment or procedure. Such decisions require the
consideration of many factors, and patients may have the capacity to make
some decisions—but not others—regarding their medical care.
Have you ever been puzzled about whether a patient has the capacity to
make treatment decisions? If the patient lacks the capacity to make a certain
decision, do you know what to do next? The following case of a man with
fever and confusion highlights several of the issues germane to capacity
decisions. The discussion and appended references should clarify key issues
in the determination of capacity.
SCHEDULING
Scheduling is an important tool for manufacturing and engineering, where it
can have a major impact on the productivity of a process. In manufacturing,
the purpose of scheduling is to minimize the production time and costs, by
telling a production facility when to make, with which staff, and on which
equipment. Production scheduling aims to maximize the efficiency of the
operation and reduce costs.
Production scheduling tools greatly outperform older manual scheduling
methods. These provide the production scheduler with powerful graphical
interfaces which can be used to visually optimize real-time work loads in
various stages of production, and pattern recognition allows the software to
automatically create scheduling opportunities which might not be apparent
without this view into the data. For example, an airline might wish to
minimize the number of airport gates required for its aircraft, in order to
reduce costs, and scheduling software can allow the planners to see how this
can be done, by analyzing time tables, aircraft usage, or the flow of
passengers.
Companies use backward and forward scheduling to allocate plant and
machinery resources, plan human resources, plan production processes and
purchase materials.
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Forward scheduling is planning the tasks from the date resources become
available to determine the shipping date or the due date.
Backward scheduling is planning the tasks from the due date or required-by
date to determine the start date and/or any changes in capacity required.
The benefits of production scheduling include:
Process change-over reduction
Inventory reduction, leveling
Reduced scheduling effort
Increased production efficiency
Labor load leveling
Accurate delivery date quotes
Real time information
(b) THE MANUAL AND QUANTITATIVE MODELS FOR PROCESS
LAYOUT DESIGN
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