3Q_STUDY_MATERIAL_GUIDE

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School

Ashworth College *

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Course

L02V

Subject

Economics

Date

Jan 9, 2024

Type

txt

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Uploaded by voicehex9

3Q_STUDY_MATERIAL_GUIDE \ \ Fill in the blank. _______ the forecast time horizon is a primary method for counteracting forecast error. _______ is the ratio between cumulative forecast error and the most recent estimate of mean absolute deviation. ________ forecasting methods should be used for predicting the demand patterns of new products introduced in the market. Respond to the following based on your reading. Describe each of the five demand components in a time series (of past demand data). Using a simple three-period, moving average forecast model, what's the forecast of demand for Week 6 given the historical demand levels shown below? Week Demand 1 24 2 19 3 30 4 25 5 31 Measured by the mean absolute deviation, which of the forecast methods—1, 2, or 3— provides the highest degree of forecast accuracy for the five weeks of data shown in the table below? Week Demand Method 1 Method 2 Method 3 1 24 23 26 21 2 19 25 22 20 3 27 21 23 23 4 25 30 29 22 5 31 25 32 28 Decreasing Tracking signal Qualitative Level is the relatively constant average demand during a time interval. Trend is an increase or decrease in the average demand over time. Seasonality is a regularly repeated pattern of increasing or decreasing demand, such as yearly, each semester, weekly, or daily. Cycle is increasing or decreasing demand over long periods, often many years. These changes can be due to changes in the overall economy or changes in product or service life cycles. Random error reflects short-term fluctuations in demand that can't be forecast. 30 + 25 + 31 = 86 86 ÷ 3 = 28.67 Methods 2 and 3 are equal. Both methods, 2 and 3, have MAD = 14 ÷ 5 = 2.8. (NOTE: MEAN ABSOLUTE DEVIATION IS PROVIDES THE HIGHEST DEGREE OF FORECAST ACCURACY) Fill in the blank.

Aggregate planning assumes that facilities can only be changed over the _______ range. A wait-and-see facility approach uses a _______ capacity cushion. A single Ford plant builds a family of pickup trucks to serve the global market. This is an example of a _______. Respond to the following based on your reading. Assume you've been assigned the task of identifying a chase strategy aggregate production plan for the coming year. You've been informed that beginning inventory is 500 units, your plan should provide an ending inventory for the year equal to 200 units, and you've been provided the following forecasts of aggregate demand. Knowing that the typical objective of chase plans is to avoid carrying inventory, what should you choose as the planned rate of production for the first quarter? Quarter Forecast 1 6,000 2 5,500 3 5,000 4 6,500 If a facility has a utilization rate of 80 percent, and current output levels require 3,328 hours annually, what's the facility's annual capacity? Describe the types of short-range, medium-range, and long-range capacity decisions. Describe the most important questions to be answered concerning facilities decisions. Apply the questions to a fast-food restaurant chain with expanding demand. long small product-focused facility 6,000 – 500 = 5,500. The planned rate of production would be 5,500 units. 3,328 ÷ 0.8 = 4,160. The facility's annual capacity would be 4,160 hours. Short-range: Decisions are constrained by aggregate planning and facility decisions. Allocate the available capacity by assigning it to specific activities. Medium-range: Determine the workforce level and production output level within the facility capacity available. Long-range: Obtain the physical capacity that must be planned, developed, and constructed before its intended use. How much capacity is needed? In a fast-food restaurant chain, determine the forecast demand and strategically decide the capacity cushion: large, medium, or small. How large should each facility be? In a fast-food restaurant chain, balance economies of scale with diseconomies of scale and determine the appropriate size. When is the capacity needed? In a fast-food restaurant chain, the timing may use one of two strategies: preempt the competition, or wait and see. A preempt-the- competition strategy is more likely in this example because the demand is already known to be expanding. Where should the facilities be located? In a fast-food restaurant chain, as with most front-office services, the facilities must be located near customers. The firm should also consider quantitative factors such as ROI, NPV, transportation issues, taxes, and so on. The firm should also consider qualitative factors such as language and norms, worker attitudes and availability, customer attitudes, proximity to customers and suppliers, and competitors. What types of facilities/capacity are needed? In a fast-food restaurant chain, this will most likely result in a market-focused facility because the service must be near its customers, within the market that it serves.

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