Use of forecast Information

A manager can take a reactive or proactive approach to a forecast. A reactive approach views forecast as probable descriptions of future demand, and a manager reacts to meet that demand i. e. the manager tries to adjust production rates adjustment inventories, adjust the workforce etc. While a proactive approach seeks to actively influence demand by advertising, pricing or product/service changes.

Generally, proactive approach require either an explanatory model 9regression) so as to make two forecast viz. present value and future prediction.

Forecasts are the basic planning. In other words forecasts are vital inputs for both the design and the operation of the production systems to anticipate the future.

Simulation

To simulate is to try of duplicate or imitate the features, appearance, and characteristics of a real system. Simply, simulation is a technique of testing a model, which resembles a real-life situation.

The term simulation in the context of business and social science applications refers to the operation of a numerical model that represents the structure of a dynamic process. Given the values of initial conditions, parameters and exogenous variables a simulation is run to present the behaviour of the process over time. Simulation approach can also be useful in building models for understanding future conditions.

Operations Management

Since 1970s, service sector become a prominent sector for economic and social development of the country. Therefore, the whole organizations are classified into manufacturing and service sectors. Then, the new term operations management emerged in the place of production management.  The production management changed into operations management. Therefore, operations management focuses more in service sectors.

Intermittent Production system

In this system, goods and services are produced to fulfill the orders of customers rather than for stock. The production facilities used in this system are flexible enough to produce wide varieties of products accordance with the order and need of customers. Therefore, there is no continuity in flow of material and resources. The flow is intermittent i.e. not continuous. In this system, raw materials, process, and design should be continuously adjusted and changed with the changes in design, shape, size, quality, and orders of customers. As a result, production planning and controlling becomes complex. It is widely used in hospitals, machine shops, restaurants, furniture, and offset printing press etc. 

Quantitative Method

Quantitative method involves either the extension of historical data or development of associative models that attempt to utilize explanatory variables to make a forecast. The qualitative techniques are used because it is quite impossible to quantify them. Quantitative techniques consist mainly of analyzing sometimes contaminate qualitative menthods. The basic quantitative methods of forecasting are extrapolative or time series and causal forecasting.

Stable rupee amount per share

Under this scheme, a firm distributes an equal sum of money as dividends in every time period. Dividend per share is not effected with the fluctuations in earnings. Stockholders receive fixed or constant rupee income in every time period.

Ex-Dividend date

The date when the rights to dividends leaves the stock is called the ex-dividend date. Generally, ex-divided date  is set four days prior to the holder of record date.

Declaration Date

The date on which the meeting of board of directors passes a resolution to pay a dividend is known as declaration date.

Motives of holding Inventory

1. Transaction motive
2. Precautionary motive
3. Speculative motive.

Meaning of Risk

Generally risk is taken as negative term. In finance it is the variability of actual future return from the expected return. In other words, risk is the possibility that the actual return from holding a security will deviate from the expected return. So risk is the outcome of uncertainty and there is perfect correlation between risk and uncertainty.