Forecasting Techniques for Planning Production Schedules

Short range production planning involves making decisions for the immediate future, usually up to a few months ahead. To make accurate forecasts, different forecasting techniques can be applied. Some of the popular techniques are:

1. Moving Average: This is a simple technique that involves calculating the average of the past data points to predict future values. The moving average can be calculated for different time periods, depending on the level of accuracy required. However, this method assumes that the future values will be similar to the past values, which may not always be the case.

2. Exponential Moving Average: This is an improved version of the moving average, which assigns more weight to the recent data points. The technique is particularly useful when the data has a trend or seasonality. However, it may not be suitable for forecasting if the historical data is erratic or has sudden changes.

3. Regression Analysis: This technique involves analyzing the relationship between two or more variables to predict future values. For production planning, the regression analysis can be used to determine the correlation between production output and various factors such as raw material availability, labor availability, and machine downtime. However, it may not be suitable if there is no clear correlation between the variables or if the data is insufficient.

4. Delphi: This technique involves obtaining expert opinions on the future values. The experts are selected based on their knowledge and experience in the field. The opinions are collected anonymously and then aggregated to arrive at a consensus. It is useful when there is no historical data or when the future values are uncertain. However, it may not be suitable for short-term production planning as it may take time to gather expert opinions.

Answer Explanation:

Option D, Delphi, is not suited for making forecasts for planning production schedules in the short range. This is because the technique involves obtaining expert opinions, which may take time to gather and analyze. In short-term production planning, quick decisions are required, and it may not be feasible to wait for expert opinions. Moreover, the Delphi technique is more suited for long-term forecasting, where the future values are uncertain, and expert opinions can provide valuable insights.