Air Force Combat Wings - Lineage, Honors Hists, 1947-77 by C. Ravenstein

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The next figure shows an outlook matrix, and gives examples of the types of methods that might be adopted for different combinations of long-term and short-term outlook. Here, outlook is defined as: Outlook = forecast demand forecast capacity 38 © Pearson Education Limited 2009 Slack, Chambers, Johnston, and Betts, Operations and Process Management, 2nd Edition, Instructor's Manual Three broad states of outlook are identified for both long and short terms: ‘poor’ is when the ratio of forecast demand to forecast capacity is less than 1; ‘normal’ is when the ratio is approximately equal to; ‘good’ is when the ratio is greater than 1.

Demand is driven partly by the weather – chocolate is less popular in summer – and partly by cultural factors – chocolate is a popular gift at Christmas and Easter in many countries. Nestlé plants use a combination of strategies to cope with these demand fluctuations. Some products can be stored in anticipation of seasonal peaks. However, there is a shelf life limit on storage time if Nestlé’s high quality standards are to be maintained. Off-peak sales volumes can also be influenced through the use of special offers and product promotions.

What mix of products/services am I expected to produce? ’ And so on). By writing all these points on the board, one can often identify all the major problems of measuring capacity. ) and ask them to identify • the nature of demand fluctuation and what influences it; • the way in which they can measure their capacity; • the alternative ways they could cope with fluctuating demand. ). Teaching hint – Examples from the food industry are usually useful. ). Also, the effective supply of some foodstuff is both seasonal and uncertain.