Capacity planning Forecasting

The developed modelling system can be used to plan field campaigns, interpret measurements, and provide the capacity for forecasting oxidants, particulate matter and toxics. Also, it can be used to provide guidance to evaluate exposure studies for people, animals, crops and forests, and possibly for epidemiological studies. 

The consolidation center needs forecasts from the plant, for capacity planning if it is acting as a service contractor, and to order from suppliers if it is acting as a trading company. 

The key factors that can influence the decision-making process are product specihcation, production capacity, quality, cost and time. Based on the product specihcation, the buyer will determine which product will be purchased, will select the supplier and will negotiate on the delivery terms and price. The production capacity, sales forecasting, preseason style testing, sampling, merchandise line planning and development will ultimately govern the overall procurement process. 

Capacity decisions are based on forecasts of donand at several different levels. Long-range capacity planning needs forecasts to be made several years ahead and includes facility planning. Short- and medium-term forecasts span 2-3 years, and generally are used to determine people requironents, leasing of premises, machines and equipment, and product details. In the more inunediate short-term forecasts are used to plan, order and schedule resources on a monthly, weekly and daily basis. The shorter the time frame, the more precise the forecast must be. 

MODELS FOR FORECASTING, DEMAND MANAGEMENT, AND CAPACITY PLANNING... 

With improvements to forecasting and a reliable level of accuracy as deliverables, the firm looks next at its demand management and capacity planning systems. For any such system to work effectively, the firm must meticulously collect the necessary data from everyone who can generate valuable information about demand — internal sales representatives, customer service personnel, channel partners, distributors, customers, and consumers. This data must then be refined frequently and updated to match actual consumption and replenishment needs. Any alterations to changing consumer preferences, customer needs, buying patterns, competitive moves, and market conditions need to be part of the input to a dynamic system of analysis, direction, and response. The process is continuous and requires maintenance to keep the demand plan as close to actual consumption and replenishment needs as possible. 

To ensure that there is enough capacity and resources available to achieve the consensus forecast it is necessary to produce a rough cut capacity plan - otherwise known as a resource plan. Essentially the logic behind the rough cut capacity plan is to look at the aggregate product family forecast for the planning period and to translate that into the capacity and resources needed, e g. how much machine time, how much time in an assembly process, how much transport capacity and so on. 

The financial forecast (communicated to financial markets) is affected by the operational demand forecast and the plan for capacity and asset utilisation. The capacity plan is used in both mid (for example, which warehouse will hold which products from the assortment ) and short term (for example, how many products can we make tomorrow ). Asset footprint/forecast is the mid- to long-term plan for capacity needed in the supply chain to cope with volume of demand and nature of demand for services (for example, how many warehouse spaces do we need in Europe ). 

As shown in the Lindt example, historical data are often used for forecasting and capacity planning. If historical demand data are to be used, an accurate depiction of what occurred in the past is needed. Accurate information is incredibly important but can be difficult to... 

Production planning includes considerations on production objectives over a certain time horizon given marketing forecasts for prices and product demands, equipment availability, and inventories. This is a macrolevel problem of the allocation of production capacity, time, product inventories, and labour and energy resources, so as to determine the production goals that maximize the total profit over an extended period of time into the future (e.g. a few months to a few years). 

The terms able to promise or available to promise (ATP) indicate whether a given customer, product, volume, date, or time request can be met for a potential order. ATP requests might be filled from inventory, unallocated planned production, or spare capacity (assuming additional production). When the production scheduler is content with the current plan, made up of firm orders and forecast orders, the forecast orders are removed but the planned production is left intact. This produces inventory profiles in the model that represent ATP from inventory and from unallocated planned production (Baker, 1993 Smith, 1998). 

Detailed inventory plans and shipping schedules can be developed, taking into account forecast of demand, economic lot size and planned production capacity. These are all correlated to financial advice on costs, and a model is utilized to project the cause and effect if any of these particular items are radically modified. 

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