Assignment: Forecasting and Demand Management Anticipating demand is the basis for almost all planning processes in an organization. Being able to forecast demand with a reasonable degree of accuracy is, therefore, critical to an organization's success.
If demand forecasting is accurate, the efficiency of the supply chain can be optimized by reducing inventory and maintaining appropriate levels of capacity.
Forecasting is a dynamic process that must be agile enough to allow all segments of the supply chain time to respond and make modifications.
This week, you will be researching the main categories of forecasting techniques, including qualitative, time series analysis, and simulation, and the reasons for using these techniques in a variety of business contexts.
As forecasting is far from an exact science and forecasts are frequently wrong, you will also look at how estimates of error can be calculated statistically and applied to make rationally based adjustments.
Your purpose this week will be to analyze the elements of good forecasting in order to synthesize an effective model of demand management.
In Week 1 of this course, you selected a public company, or one with which you are familiar, and analyzed the company's supply chain macro-processes.
Submit a 2- to 3-page assessment of the critical role of demand forecasting as a key element in the overall planning and decision-making processes of your selected organization. In your analysis, address the following:
• To what extent does demand management, as practiced in an organization, support the view that it is critical to the success of an organization and to your publicly traded company, in particular?
• What is the role of forecasting in the supply chain of the organization? Be sure to provide clear examples illustrating how forecasting is a driver of planning decisions.
• What are the various forecasting techniques, and how are they appropriate or not appropriate for an organization and/or for your publicly traded company?
• Using elements of good forecasting, formulate recommendations for effective forecasting for your publicly traded company. Include in your recommendations the appropriate steps for estimates of error to be applied as rational-based adjustments.