Forecasting

B

Brisbane Rob

We budget to manufacture about 10 000 units per month and the dail
production is recorded in a column along side the applicable date. Th
materials we use vary in quality which means production can sometime
run above or below budget for days at a time. What would be the bes
method to forecast production on an on-going basis?

We work Monday to Friday but occassionally on Saturdays.

Any ideas?

Thank
 
G

Gary''s Student

The best forecast is based upon specific manufacturing data such as
inventory, quality rejection rates, etc. Another reasonable approach is to
use a mirror forecast:

Keep track of two separate running averages. The short-term average over
the previous 10 days and a long-term average over the preceding quarter.

Forecast the next 10-20 days using the short-term average and the balance
forward using the long-term average.

TO validate this approach, keep track of predicted production vs actual
production
 
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