2nd Lecture

15 July 2009 PRODUCTIVITY Productivity = Units Produced Input used

[output/input]

Productivity Calculations Productivity = Output (add all) Forecasting – A process of predicting a future event – Underlying basis of all business decisions  Production  Inventory  Personnel  Facilities Time Horizons  Short-range forecast  Medium-range forecast (comprehensive)  Long-range forecast Types of Forecasts  Economic (inflation, money)  Technological  Demand (predict sales of existing products)  Strategic importance  Human resources  Capacity  Supply chain management Approaches Qualitative Methods (description) < Jury of Executive Opinion < Delphi Method < Sales Force Composite < Consumer Market Survey Quantitative Methods (number) Overview of Quantitative Approaches 1. Naïve approach 2. Moving averages Time-series models 3. Exponential smoothing *Time-series Models  MA =

demand in previous n periods n

4. Trend projection 5. Linear regression

Associative models

At – Ft (ENGINEERING) House of Quality Robust Design – same to be as next year Computer Aided Design – CAD Two Ways Quality Improves Profitability ☛ Sales Gains ☛ Reduced Costs Flow of Activities < Organizational Practices < Quality Principles < Employee Fulfillment < Customer Satisfaction Quality – ability to satisfy customers/own needs Views ≈ ≈

≈ user-based manufacturing-based product-based

Goodwill Implications ≈ company reputation ≈ product liability ≈ global implications