Business
Module 2
ITC
Ed. 2002
Unit 1
Unit 2
Unit 3
Unit 4
Unit 5
Introduction
What Needs to be
Specified
Specifying the Product or Service
Quantity,
Delivery &
Service
the
Process
Learning Objectives
By the end of this Unit, you should be able to:
Describe different types of demand patterns and explain the difference between dependent and independent demand.
Explain the main different ways of forecasting demand.
Describe the main issues to consider when specifying delivery and supplier service/responsiveness. Outline other types of information important to the supplier that should be included in a specification.
ITC
M2:U4:1
Purchase
Purchase
Specification
Specifying the required product/ service
Specifying
the quantity
ITC
Specifying the delivery requirements Other information needed by the supplier Specifying supplier service/ responsiveness M2:U4:4.2-1
Action Point
4.2-1
The importance of good demand information
“Component Z: quantity: 1200 units at $10.00 each
= $ 12,000 total”
What other information do you need?
ITC
M2:U4:4.2-2
Dependent demand depends on demand for something else
(e.g., steering wheels for motor cars)
Independent demand relates to standalone requirements (e.g., capital purchases)
ITC
Occasional demand Continuous demand M2:U4:4.2-3
Characteristics of Demand
Trend: constant, increasing or reducing. But may change over the long-term.
Cyclical fluctuations: Demand tends to increase or decrease over extended periods of time due to business cycles, product life-cycles, etc.
Seasonality: influenced by weather, regular events such as holidays, festivals, or the end or beginning of financial years, etc.
Random variations: when demand varies from the underlying pattern due to unforeseen reasons.
ITC
M2:U4:4.2-3a
Demand characteristics
1. Trend:
a)
c)
b)
PAST
FUTURE
ITC
Ed. 2002
Unit 1
Unit 2
Unit 3
Unit 4
Unit 5
Introduction
What Needs to be
Specified
Specifying the Product or Service
Quantity,
Delivery &
Service
the
Process
Learning Objectives
By the end of this Unit, you should be able to:
Describe different types of demand patterns and explain the difference between dependent and independent demand.
Explain the main different ways of forecasting demand.
Describe the main issues to consider when specifying delivery and supplier service/responsiveness. Outline other types of information important to the supplier that should be included in a specification.
ITC
M2:U4:1
Purchase
Purchase
Specification
Specifying the required product/ service
Specifying
the quantity
ITC
Specifying the delivery requirements Other information needed by the supplier Specifying supplier service/ responsiveness M2:U4:4.2-1
Action Point
4.2-1
The importance of good demand information
“Component Z: quantity: 1200 units at $10.00 each
= $ 12,000 total”
What other information do you need?
ITC
M2:U4:4.2-2
Dependent demand depends on demand for something else
(e.g., steering wheels for motor cars)
Independent demand relates to standalone requirements (e.g., capital purchases)
ITC
Occasional demand Continuous demand M2:U4:4.2-3
Characteristics of Demand
Trend: constant, increasing or reducing. But may change over the long-term.
Cyclical fluctuations: Demand tends to increase or decrease over extended periods of time due to business cycles, product life-cycles, etc.
Seasonality: influenced by weather, regular events such as holidays, festivals, or the end or beginning of financial years, etc.
Random variations: when demand varies from the underlying pattern due to unforeseen reasons.
ITC
M2:U4:4.2-3a
Demand characteristics
1. Trend:
a)
c)
b)
PAST
FUTURE