Disney Operation Management Essay Example

Disney’s Planning Process Aggregate planning at Disney World is all about people—how many people will visit the parks and what they will do while there. The Disney property in Florida includes 4 parks, 20 hotels, 27,500 rooms, 160 miles of roads, and 56,000 employees. Forecasting attendance and guest behavior help plan for more than 1 billion customer interactions per year and the purchase of 9 million hamburgers, 50 million Cokes, and tons of “tangible memories. ” Planning begins with a 5-year forecast of attendance based on a combination of econometric models, experience-based models, extensive research, and a magic mirror. .

1. Econometric models examine the international economies of seven key countries, their GDP growth, foreign exchange rate, and consumer confidence.
2. The experience-based model looks at demographics, planned product introductions, capacity expansions, and marketing strategy.
3. Extensive research
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   is conducted by 35 analysts and 70 field personnel year-round. Over 1 million surveys are administered to key household segments, current guests, cast members, and travel industry personnel.

4. The magic mirror is the patented part of the forecasting procedure researcher that, in part, accounts for the mere 5% error in the 5 year attendance forecast and the 0% error in annual forecasts. Disney’s 5-year plan is converted to an Annual Operating Plan (AOP) for each park.

The AOP is otherwise known as Aggregate Production Plan. is a long-term strategic decision that establishes a firm’s overall level of resources. Capacity decisions affect product lead times, customer responsiveness, operating cost, and firm’s ability to compete. Inadequate capacity can lose customers and limit growth.

Excess capacity can drain a company’s resources and prevent investments in more lucrative ventures. Critical Decisions are “when