Demand Forecasting

Demand forecasting is the prediction, projection or estimation of expected demand over a specified future time period.


Capacity Requirement Planning

In a nutshell Capacity Planning is the process of satisfying the demand requirements with the available resources.

The function of establishing, measuring, and adjusting limits or levels of capacity. The term capacity requirements planning in this context refers to the process of determining in detail the amount of labour and machine resources required to accomplish the tasks of production. Open shop orders and planned orders in the MRP system are input to CRP, which through the use of parts routings and time standards translates these orders into hours of work by work centre by time period. Even though rough-cut capacity planning may indicate that sufficient capacity exists to execute the MPS, CRP may show that capacity is insufficient during specific time periods.

Enterprise Resource Planning E.R.P. Systems

An industry term for the broad set of activities supported by multi-module application software that helps a manufacturer or other business manage the important parts of its business, including product planning, parts purchasing, maintaining inventories, interacting with suppliers, providing customer service, and tracking orders. ERP can also include application modules for the finance and human resources aspects of a business. Typically, an ERP system uses or is integrated with a relational database system. The deployment of an ERP system can involve considerable business process analysis, employee retraining and new work procedures.

Forecast Intervals (Time Buckets)

The period of time for which forecasts are calculated, such as week, month, or quarter. This interval indicates how demand transactions are accumulated into the time series for forecasting.


Dependency is a link between relationships on activities of operations in a production environment. (Terminal Elements)

There are four kinds of dependencies with respect to ordering terminal elements.

  1. Finish to start (FS)            B can’t start before A is finished

  1. Finish to finish (FF) B cannot finish before A is finished
  2. Start to start (SS). B cannot start before A starts

  1. Start to finish (SF)           B cannot finish before A starts

Finish-to-start is considered a “natural dependency” whereas all the others are constraints imposed by the scheduler to reflect resource constraints or preferential dependencies. SF is rarely used, and should generally be avoided.

There are three kinds of dependencies with respect to the reason for the existence of dependency:

  1. Causal (logical)
    • It is impossible to edit a text before it is written
    • It is illogical to pour concrete before you dig the foundations
  2. Resource constraints
    • It is logically possible to paint four walls in a room simultaneously but there is only one painter
  3. Discretionary (preferential)
    • I want to paint the living room before painting the dining room, although I could do it the other way round, too

Early critical path-derived schedules often reflected only on causal (logical) or discretionary (preferential) dependencies because the assumption was that resources would be available or could be made available. Since at least the mid-1980s, competent project managers and schedulers have recognized that schedules must be based on resource availability. The critical chain method necessitates taking into account resource constraint-derived dependencies as well.

In addition, these dependencies can be modified by leads, and lags. For example: When building two walls from a novel design, one might start the second wall 2 days after the first so that the second team can learn from the first. This is an example of a lag in a Start-Start relationship.


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