Essay on Roles of Forecasting in Demand Management

Introduction

According to Valentina Carbone, on his speech on forecast and demand-supply, Since the forecast predicts the customers demand in the business market when the company is unable to sustain their regular production, to shape their scale resources. With the fueling of the right raw material planning process, this enables the shareholders through the management of the company to make timely purchase strategies to her suppliers; this gives the suppliers the confidence in the firm hence building business relation (Chase 67).

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

With the help of forecasting, Valentina explains that it helps to achieve the most available objective that matches the demand and supply. Since it is difficult to match demand supply since the need varies and supply is inflexible, for instance, a situation where a well of the firm with complete qualified management and strategic plans, but fails to have the right way in solving their supply and demand of her clients. Forecast being the centre and the pivotal in the planning of business, it gives out the essential business activities like broad planning financial planning distribution, risk management, and marketing strategies, most of the steps taken in industry to hit the target and achieve its goals are as a result of good forecasting (Siemsen and Kolassa 43). On Valentina's explanation, the role of prediction and supply in business management as she states that it drives all the steps and processes of supply chain, like order management, packaging, and distribution, and outbound logistics, when that increases, it may lead to increase in customer level which leads to more sales making huge profits which is a goal to any business firm

Characteristics of Forecasts

Business forecasting has many dimensions and depending on utility, and how the application is made, not all business forecasting is perfect, but the prediction depends on the expertise and techniques used. In addition to that, business forecasts have the following aspects which play a significant role in making the practice quality for a better outcome (Chase 53). We have a technology forecast, that foretells future technology improvements, and upgrading, demand forecast existing data stored in the firm help in surveying the market and making a strategy to understand the nature of the market and the demand of the customers before the release of the products, lastly is the economic forecasting, this forecasts on the market policies and the inflation rates and the interest rates used in the market.

Forecast analyses the data from the past and makes a comparison with the current data which helps in shaping the future nature of the business from the step of processing to the market, which allows the company to make plans in prior (Chase 54). Secondly, another characteristic of forecast is use of guesswork, I may not typically say it's a guesswork, but according to Sunil Chopra of Kellogg school of management uses the word, accurate assumptions of joining the dots of the past nature of the market and the current nature and precise analysis on the sequence, that helps in predicting the future kind of demand. Forecast works with the help of future events and present happenings; scientific methods are used to predict the future of the market, like taking data and the use of computers (Lawrence 46)

Different Between Long- Medium-and Short-Term Forecasting

Starting with short-term forecast, this takes about the production planning and control of production, that should be solved or implemented for every season, it happens seasonally. The period of short-term forecasting is not constant, it varies with the company, whereas the long-term forecasting that deals with general items including the government policies and even the market, social change, and technological change, and even the market equilibrium. More so, in the long-term prediction, they predict over a more significant period (Lawrence 46). Long-term forecasting tends to predict the sales and customer demand of some heavily built companies and capitalized industries over a greater period like two years to even a century. Lastly, the medium forecasting, are made for minor decisions depending on the operation of the business, it helps small firms in solving bankruptcies since that is the main threat to small firm businesses. Sometimes medium forecasting is used to help some staff members like the marketing department, to realize their level of sales as per their written target, and amount of money to be spent on to achieve the sales effort and short time capital needed for manpower or any equipment that would increase production. A medium-term forecast is normally one year.

Works Cited

Chase, Charles W. Next Generation Demand Management: People, Process, Analytics, and Technology. John Wiley & Sons, 2016.

Lawrence, Kenneth D., and Ronald K. Klimberg. Advances in Business and Management Forecasting. Emerald Group Publishing, 2017.

Siemsen, Ennis, and Stephan Kolassa. Demand Forecasting for Managers. 2014.