Operations Decision Making

Part 1

Linear regression analysis is the most accurate technique as it shows the relationship between the dependent variable and the explanatory variables. The forecasting technique is important because of its nature that makes it more accurate than the others as it is able to give a very close prediction in relation to the most actual observed values (Mahapatra, 2010). Simple moving average arrived at the calculation of the arithmetic of the moving average of the closing price of various securities of a number of time periods that is then divided by the total number of the periods. Weighted moving average refers to the calculation of the analyzed data by a way of creating averages of the different sets that includes variation such as simple, cumulative or weighted forms. Exponential smoothing refers to the single averages of the past observations that are weighted equally (Mahapatra, 2010).

Part 2

Management may opt to build up capacity in the anticipation of demand due to its numerous benefits such as the reduction of overtime costs, flexibility yield in management option, reduction of manufacturing costs and the fewer chances of sellouts is achieved. An example of such is a storing inventory which can be worth when the demand is high. There are also some disadvantages in this strategy when the actual increase in demand does not occur resulting in high losses (Aepli, Ribaux & Summerfield, 2011). A demand response example such as New England demand response program that is based on 30 minutes real time has various advantages such as innovative programs that can actually turn the energy cost centers into revenue producers in which they are recurring, improvement of energy management and also reduce the risks of power outages. It is disadvantageous because it is a costly program to initiate (Aepli, Ribaux & Summerfield, 2011).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reference

Aepli, P., Ribaux, O., & Summerfield, E. (2011). Decision making in policing: Operations and management. Lausanne, Switzerland: EPFL Press.

Mahapatra, P. B. (2010). Operations management: A quantitative approach. New Delhi: PHI Learning Private Limited.