# Describe the Internal Supply Forecasting for Micro Forecasting.

**Course:**Master of Tourism Management

**Internal Supply Forecasting: Analysis of Wastage:** Wastage includes voluntary retirement, normal retirement, resignations, deaths and dismissals. Wastage analysis is a productivity indicator that is often used in quantitative value chain analysis. A simple formula has been devised by British Institute of Management (BIM) index which finds the wastage as a percentage of staff in position, i.e.

**Manpower leaning in a year / Annual Manpower Wastage X 100**

This formula comprises of many disadvantages as it takes no account of the characteristics of manpower where important part is the length of service and skill used in it. Also it is very cumbersome to find the operational and financial implications based on this very formula. It is not capable of giving any meaningful results for manpower planning.

**Stability Index:** This is a kind of alternative method which works on the length of service of those workers leaving the organization. This is known as stability index. The method to measure the complement of wastage rate is as under:

**Manpower with one year service at time t / Manpower in position at time t – 1 X 100**

###### This method is only the indicative of the percentage of workers who worked for the organization for one year. This somehow does not directly reflect the extent of wastage.

**Modified Stability Index** also referred as Bowey’s stability index.This comprises of all employed workers in the organization and weight-age is imparted to people with different lengths of service. It can be worked out as under:

**Total length of service of manpower employed at the time of analysis / Total possible length of service had there been no manpower wastage X 100.**

The main disadvantage of the system is that it is of no help in case of forecasting of manpower supply whereas it is of some use to find the extent of wastage when length of service is taken into account.

**Cohort Analysis:** Cohort analysis is an outcome variable as a function of cohort membership, age, and period. This is mainly pertaining to the group of people or a group of staff it an organization who did join the organization at the same time. By using this cohort analysis analyzing and forecasting wastage of specific group of manpower can be calculated. The analysis is done for the personnel as management trainees, trainee escorts and computer professionals, etc. The system is not very apt but has some flaws as in case of forecasting exercise information is required yearly. It becomes very difficult if the cohorts were more. Then to get a meaningful analysis of wastage each leaver needs to be related to the concerned cohort and also the size of the cohort must be available. Availability of computerized information is also must.

**Census Method:** Census method comes very handy when the problems to find solution by cohort method arise. When this method is used at that time a snapshot of the total situation is taken at a particular point of time: Then on the grounds of this data, it is easy to estimate the solution.

**Analysis of Internal Movements:** Internal movements are comprised of two kinds i.e. vertical and horizontal. Vertical movements are the movements between levels of manpower which is employed either by promotion or demotion. Horizontal movements are movements between locations within the same category or level of manpower which are because of transfers which takes place.

**Markov Chain Model:** Markov chain means that future states depend only on the present state, and are independent of past states. It can be explained that the description of the present state fully captures all the information that could influence the future evolution of the process. It also means that all state transitions are probabilistic and at each step the system may change its state from the current state to another state (or remain in the same state) according to a probability distribution. The changes of state are called transitions, and the probabilities associated with various state changes are called transition probabilities. This method is very useful method of analyzing and forecasting internal movements. It helps in the estimation of transition probabilities relevant to each vertical and horizontal movements.