MODULE 0th 
                                       DEMAND FORECASTING 
               
                  LABWORK OBJECTIVE 
               
                     1.  Students understand the relationship between time series patterns with 
                       forecasting methods. 
                     2.  Students are able to calculate the error rate using MSE as to get the optimal 
                       method. 
                     3.  Students understand the forecasting verification phases by using the Moving 
                       Range Chart. 
                     4.  Students are able to know and understanding the actions that can be taken 
                       when out of control conditions occur. 
               
                  PRACTICUM OUTLINE 
               
                                            Production 
                                             Planning 
                                                                Forecasting 
                                                                   Types 
                                            Agregation 
                                             Planning 
                         Demand                                 Forecasting 
                       Forecasting                                Methods 
                                            Forecasting 
                                                              Forecasting Data 
                                                                  Patterns 
                                            Verification 
                                                                Forecasting 
                                                                Performance 
                                                                  Criteria 
               
                  THEORETICAL FOUNDATION 
                  1. Production Planning 
                  1.1 Definition of Production Planning 
                  Production planning is defined as the process of producing goods over a certain 
                  period as predicted or scheduled through the organization of resources such as labor, 
               
         
           raw  materials,  machinery  and  other  equipment.  Production  planning  requires  the 
           estimator of the demand for products or services that are expected to be provided by 
           the company in the future. Thus, forecasting is an integral part of production planning 
           (Buffa & Sarin, 1996). 
           1.2 Production Planning Objectives 
           The objectives of production planning according to Hendra Kusuma (1999) are: 
            a.  Forecasting product demand stated in the number of products as a function of 
             time. 
            b.  Determine  the  amount  when  ordering  raw  materials  and  components 
             economically and integrated. 
             c.  Establish a balance between the level of production needs, order fulfillment 
              techniques,  and  monitor  the  level  of  inventory  of  finished  products  at  all 
              times.  Compare  it  with  the  inventory  plan  and  make  revisions  to  the 
              production plan at the specified time. 
             d.  Make a detailed production schedule, assignment, loading of machinery and 
              manpower in accordance with the availability of capacity and fluctuations in 
              demand for a period. 
         
           2. Aggregate Planning 
           2.1 Definition of Aggregate Planning 
           According  to  Heizer  and  Render  (2010),  aggregate  planning  is  an  approach  to 
           determine the quantity and time of production in the medium term (usually 3 to 18 
           months in the future). Meanwhile, according to Herjanto (2008), aggregate planning 
           is the heart of middle planning which aims to develop an overall production plan that 
           is  feasible  and  optimal.  From  two  definitions  above  the  conclusion  is  aggregate 
           planning is a plan made by forecasting future sales, in order to increase capacity and 
           meet customer demand while minimizing company production costs. 
           2.2 Aggregate Planning Objectives 
           The objectives of aggregate planning according to Baroto (2002), are: 
           1. Production strategy planning. 
           2. For medium-term production. 
           3. Minimizing the details in production planning. 
         
         
           4. Determine the needs of resources (labor, materials, facilities, equipment, fees, 
             etc.) 
           5. As a first step in production activities used for the preparation of the Master 
             Schedule Production (JIP). 
           3. Forecasting 
           3.1 Definition of Forecasting 
           Forecasting is a technique for predicting the future using experience from the past. In 
           a  production  system,  forecasting  is  used  to  predict  demand  in  the  coming  period 
           (Chapman,  2006).  According  to  Russell  and  Taylor  (2011:  497),  the  amount  of 
           inventory  needed,  the  number  of  products  that  must  be  made  and  the  amount  of 
           material  that  must  be  purchased  from  suppliers  will  be  determined  by  predicting 
           product demand, which aims to achieve customer needs that have been predicted. 
           3.2 Forecasting Objectives 
           The purpose of forecasting in production activities is to reduce uncertainty, so that an 
           estimate is approaching the actual situation (Ginting, 2007). 
           The following is an explanation of forecasting which is classified based on the future 
           time horizon which is covered by Heizer and Render (2010: 163), namely: 
            1. Short-term forecasting 
             This forecast includes a period of up to one year, but generally less than three 
             months. This forecast is used to plan purchases, work scheduling, the number of 
             workers, job assignments, and the level of production. 
            2. Medium-term forecasting 
             Medium-term forecasting or intermediate generally includes a matter of months 
             to  three  years.  This  forecast  is  useful  for  planning  sales,  planning  and 
             production budgets, cash budgets, and analyzing various operating plans. 
            3. Long-term forecasting 
             Forecasting is generally for planning a period of three years or more. Long-term 
             forecasting is used to plan new products, capital expenditure, location or facility 
             development, as well as research and development.