04) Heizer, Jay H. & Render, Barry. (1999). “Forecasting” en Principles of operations management. USA: Prentice Hall, pp. 139 - 172. LEARNING OBJECTIVES When you complete CHAPTER OUTLINE GLOBAL COMPANY PROFLE: Standard Error ofthe Estimate the depter you TUPPERWARE CORPORATION (Cotraluran’Coalhciates for should be able to: WHATIS FORECASTING? Repression Unes \dertty or Define: Forecasting Tine Horizons Maile Regression Anahi Forecasting Tho influence of Product LifeCyele MONITORING AND CONTROLLING Types of forecasts ‘TYPES OF FORECASTS Se, = oe THE STRATEGIC IMPORTANCE OF laptive Smoc iui to FORECASTING Focus Forecasting ari Human Resources The Computer'soleinroreatiog Pl oesene oe tele: Capacty FORECASTING INTHE SERVICE a ‘Supply-Chain Management. SECTOR ee eee ‘SEVEN STEPS IN THE FORECASTING ‘SUMMARY svsTeM EY TERMS a FORECASTING APPROACHES USING POM FoR WINDOWS IN ia ec Overview of Gustave Methods FORECASTING Regresion and Overview of Quantitative Methods USING EXCEL SPREADSHEETS IN ee as TWwESEHES FORECASTING RECAST) soe eS Se DISCUSSION QUESTIONS el (CRITICAL THINKING EXERCISE Exponential Smoothing cases Exponential Smoothing with Trend. DATABASE AE DCATION) genes ‘CASE STUDIES: NORTH-SOUTH AIRUNE; ee ‘AKRON ZOOLOGICAL PARK Seasonal Variations in Data INTERNET CASEiSTUOY BIBLIOGRAPHY CAUSAL FORECASTING METHODS: REGRESSION AND CORRELATION INTERNET RESOURCES ANALYSIS Using Regression Analysis to Forecast 139 ‘Material compilado confines académicos, se prohibe Su reproduccién total oparclal sin la autorizacion de cada autor.Suinless tet alos mols, each requiring over 1,000 hows of killed ‘anderafing, ave the hear ofthe manufacturing proces. Each mold creates the cevaet shape of new product: Molds cost an average of Stoo.oo0 nd can weigh Wren most people think of Tup- ppeeware, they envision plastic food- Storage containers sold through home partes. However, Tupperware happens to be a successful global manufacturer, with more than 85% of its $1.2 bilion in sales outside the United States. A household name in nearly 100 countries, the firm has 15 plants located around the world: one in South Carolina, four in Latin Armer- ica, one in Aria, five in Europe, and four in Asia. Throughout the world, Tupperware stands for quality, pro- viding a lifetime warranty that each 140 ‘up 10 § tons. When a specific product ix scheduled fora production run, its med is carefully placed, as we see inthe photo, imo an injection molding machine. ‘of its 400 plastic products will not chip, crack, break, or peel Forecasting demand at Tupper- ‘ware is a critical, never-ending process. Each ofits 50 profit centers round the world is responsible for ‘computerized monthly, quarterly, and 12-month sales projections. ‘These are aggregated by region and then globally at Tupperware’s World Headquarters in Orlando, Florida. ‘These forecasts drive production at each plant. ‘The variety of statistical forecast- ing models used at Tupperware in- cludes every technique discussed in this chapter, including moving aver ages, exponential smoothing, and regression analysis. At world head- ‘quarters, huge databases are main- tained to map the sales of each ‘product, the test-market results of ‘each new product (20% of the firm's sales come from products less than two years old), end the stage of each product in its own life cycle. Three factors are key in Tupper- ware's sales forecasts: (1) the number of registered "consultants" or sales representatives, (2) the percentage of currently “active” dealers (this ‘number changes each week and month), and (3) sales per sctive The plastic pellets tat are melted at 500 degrees ino Tunperware produets ‘are dropped through pipes from second-floor bins into the mackine Ihollng « mo. After being injected ino warer-conled molds at a pressure ‘up 0 20.000 pounds per square incl, the produet coals and is removed andl inspected. ‘Material compllado confines académicos, se prohibe su reproduccion total o parcial sin a autrizacin de cada autor.(2) Clear ptets flow trough (1) Ral car dalivers 40,000 bbs of pea size pestc peters. Tupperware's Manufacturing Process (8) Clea pots are med with eaored = oe ms =e & = a UAT Cieemeaeer Pree eee teee tebe meee ener ar incorporate historical data, recent events, and promotional events Tupperware maintains its edge over strong competitors ike Rubber- fine ite statistical forecasts: Althoug inputs come from sales, marketing, finance, and production, fina fore casts are the consensus of all partici Tupperwae’s version of the “jury of executive opinion" described inthis, chepter. 4 ‘Material compitado confines académicos, se prohibe su reproduccién total o parcial sina autorizaion de cada autor.