Premium
Forecasting capacity and capacity utilization in the U.S. aerospace industry
Author(s) -
Greer Wlllls R.,
Liao Shu S.
Publication year - 1986
Publication title -
journal of forecasting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.543
H-Index - 59
eISSN - 1099-131X
pISSN - 0277-6693
DOI - 10.1002/for.3980050106
Subject(s) - aerospace , product (mathematics) , capacity utilization , industrial organization , business , capacity planning , computer science , environmental economics , operations research , economics , operations management , engineering , microeconomics , geometry , mathematics , aerospace engineering
The forecasting of capacity and its utilization is particularly relevant in the aerospace industry because of long product delivery lead‐times and the forward‐pricing system. The objective of this paper is to develop a method for forecasting both the industry's capacity and its capacity utilization so that decision makers who must rely on this information may have policy guidance. The result shows that the aerospace industry's capacity expansion rate is closely tied to its present and recent past state of capacity utilization, and to anticipated changes in output. Output, in turn, can be predicted by using Five Year Defense Plans data and information on the cyclical nature of commercial business. Based on these findings, we were able to build an accurate model for forecasting aerospace industry capacity utilization.