Question: please give a brief opinion or a reply on the...
Please give a brief opinion or a reply on the below discussion, it's about forecast demand, forecasting techniques and how they are used to determine demand in a firm’s operations.
In order for a company to forecast demand they need to know what their product or products are they are going to produce. Next they will need to understand the area in which the company will be and who they want to reach, which is focusing on the customer. Once they understand the area and the customer they can begin to look in to the different types of forecasting methods. Depending on the product type they may go with seasonal forecasting, short term forecasting or trend forecasting. It could also be a combination of a few.
Forecasting techniques are important because having to little or to much inventory can cause many problems. A company would look at what they have sold in the past, they would look at different types of technology if they were producing electronics. If they were in retail they would want to look at seasonal forecasting due to changes in clothes in most areas like from shorts to pants, or tank tops to long sleeves. Logistics software helps track the shipments in and out of a company, helping companies track what they ship most of to the things that they should make less of or adjust in other ways.
Forecasting is important for many reasons, but I think the most affected area is inventory. We all know that it is the most expensive part of a business, so managing it is important in order to keep cost down. Forecasting helps you understand the past to predict the future sales of your company and keep a better control of your inventory.