Wait a second!
More handpicked essays just for you.
More handpicked essays just for you.
Importance of forecasting in
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Recommended: Importance of forecasting in
Production relates to where raw materials also known as inputs are converted into outputs. The main role of production is to produce services and products that customers demand in the most economical and efficient way (Kumar 1999).
Production planning and control is necessary in making decisions concerning utilization, acquisition, and allocation of resources in production processes with the objective of satisfying customer needs effectively and efficiently. It is used in determining workforce level, assigning of overtime work, sequencing the order in which tasks follow and deciding on production quantities (Graves 1999).
Planning challenges start with specification of client’s demand that must be met by the production plan. It is not easy to predict the exact future demand and thus sometimes future demand is not known (Graves 1999). This results to a firm relying on forecasting to predict the future demand. It is thus important for a company to formulate a plan that comes from the demand uncertainty. Alternatively it is important for a firm to revise the predicted figures frequently in order to update the forecast. This is done using the optimization models. It is very important for a firm to identify the relevant costs in a production planning. It is important to determine the variable costs of production, holding cost/carrying costs and set up costs (Graves 1999).
In production planning, there are three production systems: intermittent production, unit production and continuous production. In continuous production, products are produced in a standard process and in a sequence anticipating demand. It involves large capital investment in buying equipment and machinery to produce high quality products but with less work in i...
... middle of paper ...
...
Lean Enterprise Institute, Inc 2009. What is lean? Retrieved from:
http://www.lean.org/whatslean/
Mekong Capital Ltd, 2004. Introduction to Lean Manufacturing for Vietnam.
Retrieved from: http:// www.mengkomcapital.com
Production supervisory training, 2011. Production planning and control.
Retrieved from http://yourbusinessprofitability.com/_mgxroot/page_10766.html
Plenert, 2007. Reinventing lean, Elsevier Inc, p15.
TechTarget, 2011. Lean Production. Retrieved from:
http://searchmanufacturingerp.techtarget.com/definition/lean-production
Timestudy Institute Inc 2011.Lean Concepts. Retrieved From:
http://industrialtimestudy.com/lean.html
TMD friction 2011. Lean Management. Retrieved from:
http://www.tmdfriction.com/en/company/lean-management-
Trent J 2008. End-To-End Lean management, Library of Congress cataloging-in- Publication
Data, USA, pp153
In today’s operational management arena, there are certain expectations from a managerial aspect that must be met in order to be successful. A comprehensive look at the Space Age Furniture Company will show exactly what the Materials Requirement Planning (MRP) calculations are for this company at present time and then take the information given in order to properly suggest ways to improve the sub-assemblies. In addition, there will be an analysis on the trade-offs between the overtime and inventory costs. A calculation will be made on the new MRP that will improve the base MRP. This paper will also compare and contrast the types of production processing to include the job shop, batch, repetitive, or continuous, and determine which the primary mode of operation should be and exactly why. A detailed description on how management can keep track of the job status and location during production will also be addressed. Finally, there will be a recommendation on they type of changes that need to occur that will be beneficial to the company and at the same time add value to the customer. This paper will conclude with summary of the major points.
For any organization, planning, the first step in the four management functions, is very significant to reach success. During the planning process, organizations establish goals for expectations on performance and then decide on how to reach that specific goal. For example, increasing sales each year is Pacsun's year long goal. The stores keep all of their sales reports, return logs, and exchange records for each day, so when that same business day comes around again the following year, each store knows exactly how many sales they need to have to increase sales for the current year. They also keep track of each store's average dollar amount per sale and how many units are being sold through each transact...
The effectiveness of the production control system helps to improve the quality of the company’s product while still reducing the costs. The company is constantly looking for ways to increase the effectiveness of their production. They want to ensure that the product is at the quality they expect and always are looking to improve the quality of the product. Reduction of costs is another factor they consider, but the company refuses to produce a product that is not the quality they expect no matter what the cost savings are.
Quality is an important part of any business rather from a customer’s perspective or a producer’s perspective. Quality from a customer’s perspective is they “want value and quality has become a major factor in the value of products and service” (Russell & Taylor, 2013, pg. 53). “The customer is the most important part of the production line” (Russell & Taylor, 2013, pg. 53). This can be referred to as quality of design meaning “involves designing quality characteristics into a product or service” (Russell & Taylor, 2013, pg. 54). Now let’s look at the quality from a producer’s perspective. This can be referred to a quality of conformance meaning “making sure the product or service is produced according to design” (Russell & Taylor, 2013,
One of the main objectives of an organization is to beat its counter part in our possible way. In order for an organization to insure that they must be good at leading, planning, organizing and controlling their resources and materials to accomplish performance objectives. In other words management. There are four main types of management, Classical, Behavioural, Quantitative and now the Modern Approach to Management. The Modern Approach states that there is no one good way of management. A successful organization utilizes all the types of management. A good example of this is the movie Lean on Me, starring Morgan Freeman as Joe Clark, the protagonist of the movie. Joe is a very talented teacher, who takes a lot of pride in his work, but due to certain events (budget cuts), he has to make some very key decisions upon his future at East Side High, New Jersey. After the resignation of Joe Clark, things go back to worse at East Side High, so after 20 years Joe is once again called upon to take the duty of the principal of this once great school. His goal was to accomplish a 75% average on the state's basic skills test. This goal might be easy at any school, but then again East Side High was not just another school. The previous year the score was 33%. The school was filled with drug dealer, crime, graffiti and other things. Therefore it required a miracle to increase the school's literacy average by approximately 40%.
Accommodating customer requirements in most supply chain arrangement requires a forecast to drive the process. (book page 133) When looking into the definition of forecasting which is projecting what is going to be sold (units, seats, rooms etc) it is also important to take into consideration where and when in order to reach the future goals. (book page 133) Since it is argued that effective supply chain and logistical capacity is an important competitive advantage. (Christopher 2005) Where maximizing the revenue is the key element in hospitality sector and for hotel industry there is an increased attention on effective demand management and forecasting for reservation systems. (http://www.sciencedirect.com/science/article/pii/S0169207002000110)
After the purchasing on materials is made, then it turns to operation part which is transforming the raw material into finished food and services.
... need for this one human interaction with the system is what makes it vulnerable to errors and redundancy and the need to get it right is paramount. So the production plan is created bases on the sales order and this is shared with purchasing so that any unavailable material can be ordered. This shows how the MRP links the production with purchasing as well as accounting. Using this information links and sharing properly in the ERP can result in significant cost savings because companies are beginning to see its SCM as part of a larger process than just customers and suppliers.
Productivity is the quantity of output formed by one unit of production input in a unit of time. Inputs used in the production of the goods and services are the major determinants of any country’s productivity they are also called factors of production. There are four major determinants of productivity of any country’s economy.
Those adjustments are made by capacity management. Relevant range is important in determining the efficiency and profit of a manufacturing company. Similarly, relevant range plays an important role in operations management. It helps in making a better plan by setting a limit for production. If a production goes below or above that level then operations management come in and makes a plan to improve it. If the supply of material is affecting the level of production, then supply chain strategy comes in to find the cause of it, and then makes a strategy to fix it. Demand forecasting and relevant range are interrelated. Relevant range is set on the basis of demand forecasting. A company sets the range of production according to the demand of production. If the products are not produced within the relevant range, then it will affect the fixed and variable cost of the product and the price of a product. Price of the product has a great influence in forecasting a demand. Capacity management helps in finding the bottle neck in the relevant range, and it makes a plane to fix it. Cost behavior helps in operations management by
More recently, entrepreneurship has also been added as one of these factors. Understanding these is essential to understanding the two production functions which this WIKI article focuses on. (2) Land Understanding what is meant by land is relatively simple. This comprises all of the natural resources that a particular producer has at their disposal. Most often this means immediate natural resources, like oil or the property on which the production facility is located.
All activities in our daily life occur according to a certain plan. Production planning involves making prior decisions on how to carry out a certain strategy in a business which involves: the material to produce, the period of production, and the exact location to carry out the production process. A well designed plan with good understanding of the future outcomes helps to avoid failure due to uncertainties. Production planning aims at looking ahead and estimating the type of resources required in an organization and then coming up with the proper arrangements which enables attainment of the set production targets in the proposed plan (MBA Knowledge Base, 2011). Production planning strategy therefore involves coming up with ways and means of achieving the above objectives. To implement the plan, the organizing group has to be equipped with the information on the complete data of the product which includes; the expected operations, market research, and the methodology to be put in place. T...
There are four different functions of management. In this paper, I will define these functions; planning, organizing, leading and controlling. I will also explain how each of these functions relates to my own organization. Bateman and Snell (2004) define management as the process of working with people and resources to accomplish organizational goals. By utilizing the four different functions of management companies can work with their employees and other resources to reach the organizations goals.
This means that a plan indicates what the goals and objectives of the organization at some point in the future. Organizations usually have some variables that it should control, which may include the financial resources, the production methods, human resources and organizational assets. Forecasts and planning are an important aspect of the planning process that takes into consideration the external factors affecting the business operations, which the organization has no control of. Such variables include actions undertaken by the government, the spending habits of the consumers, the interest rates and the strategies adopted by the competitors. Owing to the fact that the management of the organization is not in a capacity to influence the external factors, its planning and budgeting should be confined within the controllable variables. This implies that planning entails what the organization is going to do in relation to the variables that it has the capacity to control. The management of an organization can use excellent budgeting to aid the planning
Lean Management is well known to bring benefits in a production company. However, its use in a service based company is still considered of some kind of innovation. In my dissertation