Why is forecasting important in a distribution company? What is it you are specifically forecasting and what is this used for?
The Management Team is all for your efforts to investigate EBBD’s forecasting situation. We want you to thoroughly analyze what we are doing, what other forecasting methods and techniques are available, and make a recommendation on how we should proceed. We are particularly interested in how to improve our short term forecasting on an annual, quarterly, and monthly basis. We also would like to know how we could do longer term forecasting, say over two or three years. And we want to know how we can generate quarterly inflation forecasts.
The Management Team wants to know
What are the various methods that we should use?
Who will do the forecasting?
How will the forecasting methods be implemented?
Why should EBBD spend any money on this new methodology? Why do we care about improving our forecasting and why is it worth the costs to improve it?
The report should provide an initial section on the background of the situation, assumptions that we need to make, discussion of your analysis of various forecasting methods, and then a recommendation with a justification as to why you are making the recommendation.
One more thing – the Management Team might want you to make an oral presentation. So you should also prepare a draft version of a PowerPoint presentation. This does not need to be a finished product, but a draft version.
The written report should be comprehensive and articulate. Send me the report and the draft PowerPoint when you have them finished. Let me know if you have any questions along the way.
~DW, VP LogOps.
LEARNING WIZARD
Use the readings in the Background to familiarize yourself with forecasting and forecasting methods. You should also search for additional information pertaining to forecasting in logistics and distribution.
Specific Information you need to identify to use in your report:
Why is forecasting important in a distribution company? What is it you are specifically forecasting and what is this used for?
Why is forecasting accuracy important? How accurate does a forecast need to be?
What is the difference between forecasting for existing product lines and for new products?
Why should companies spend time and money to improve forecasting accuracy?
How should a company use different methods but yet integrate these methods?
How does strategic planning fit in with forecasting (at least for long term forecasting/planning)?
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