Operations Management Service Management Operations

Question: Discuss about the Operations Management of Service Management Operations. Answer: Introduction Forecasting is considered to be one of the major tools for decision making, which is made by properly analysing the past data and thereby making a proper estimation about the future. In this assignment, the three types of time horizons relating to forecasting are being discussed along with different types of methods which can be used readily in each kind of time range. Classification of time horizon: Forecasting is classified under three types of times horizons which are as follows: Principles Short range Medium range Long range Duration 1 month 3 months 3 months - 3 years Type of decisions Tactical Strategic and tactical Strategic Effect Random fluctuations Seasonal fluctuations Long term business cycles Range of uncertainty Low Considerable High Examples Revision of production plans and job scheduling Planning, production, sales and budgeting. Introduction of New Products , Change in location and New development in business Table: Three types of times horizons Source: (Fitzsimmons and Fitzsimmon 2013) Short term (1 month 3 months). Under this type of time horizon, the span of time varies ranges from few days to few weeks. Trends, seasonality and the different cycles tend to have little effect on such time range. The decisions taken are mostly tactical, with a low degree of uncertainty .The nature of data is mostly in quantitative basis where the Random Fluctuations are considered to be a major element effecting the short time phase. e.g.: work assignments and scheduling of jobs. Medium Range (3 months 3 years). Under medium range of time horizon, the span of time ranges from 3 months to 3 years approximately. Under this stage, the decisions regarding productions, proper planning, sales and budgeting are being taken. These decisions taken are mostly considered as a combination of both strategic and tactical where significant degrees of uncertainty exist. Long range forecasting ( 3 years). Long term in forecasting refers to the range of time which is greater than 1 year. Under this, the decisions taken are fully in a strategic manner, with a high degree of uncertainty. According to Fitzsimmons and Fitzsimmon (2013), the major focus area under long range forecasting is introduction of new products, development of new business and decisions regarding the locality. Types of forecasting methods which can be used in each of the time horizons: There are two types of forecasting methods namely Quantitative and qualitative, which can explained as follows taking into account the three time horizons of forecasting. Quantitative methods can of methods using the past information they are: Trend analysis: This kind of method is mostly used in short term forecasting, where the past and the historical data are being examined for future exploration. The various models which are used in this context are regression, exponential smoothing etc (Hyndman and Athanasopoulos 2014). Qualitative methods: are usually used in the medium and the long run which can be discussed as follows: Market Research: This kind of method is used in the medium range of forecasting, where research is being carried out in a systematic manner. Under this method, the market researchers tend to collect all the relevant information in relation to demographic, personal and economic information. Depending on the research work, important decisions regarding planning, budgeting and sales and production are being taken. Delphi technique: According to Hyndman and Athanasopoulos (2014), Delphi technique also known as expert opinion refers to a range of panel experts who are being interrogated by means of a set of questionnaires. After such interrogation the responses provided by the experts are being used again for further questioning, this is mainly done in order to remove the effect of bandwagon and helps to get an accurate estimation about the future. Another method which is used in estimating long range time horizon is sales force survey opinion. It is also known as the collective method, where the opinions of the sales person are being taken into account rather than the consumers. Conclusion: In can be concluded that forecasting is the method of making future predictions based on the analysis of the past and present trends. Under this assignment, the three major time horizon namely short range forecast, middle range forecast and long range forecast are being discussed keeping in mind the amount of risk and uncertainty attached to each . Taking this time horizon factor in account there are two types of methods which can be best suited for each of the time series which are quantitative methods and qualitative methods, where the former deals with short term forecast and the latter predicts about the medium and long term time series. Reference: Fitzsimmons, J. and Fitzsimmons, M., 2013.Service management: Operations, strategy, information technology. McGraw-Hill Higher Education. Hyndman, R.J. and Athanasopoulos, G., 2014.Forecasting: principles and practice. OTexts