How do you respond to this reply from a discussion I would use forecasting to he

Question

How do you respond to this reply from a discussion

I would use forecasting to help determine my weekly ordering decision of Kentucky Swamp Brew by learning from the under and over estimations that I made in the past. For instance, if I was ordering and noticed that a promotion was going to start on the weekend that a order was expected to come in I would order an amount over the normal ordering amount. If I noticed that there was a decline in sales at a particular time of the month I would cut down the amount that is being ordered.

For example, during the super bowl game this is a very busy time for the beer company. Beer is one of the most drank drinks at any super bowl party. Using past forecasting versus what was really consumed I would be able to come up with an amount that allows me to produce the consumers orders. I am also able to start raising my order amount weeks in advance to start increasing the amount that is in my inventory amount. With the increased inventory I will have the capability to get emergency orders out quickly.

I think this is where forecasting can come in handle. You can use economic, cultural, seasonal, location to forecast your expected amount of orders for distribution

Explanation / Answer

I am not really sure what you need here. If you could be more specific on the context in which you want to respond, like you are questioning the reply given or you want to expand on what is given here?. As there is not much of information on the context I am only giving my generalised opinion and expansion on what was given here.

The given reply in the discussion is having fairly valid description about what forecasting is all about. The essence of forecasting is to use the past data and predict the future numbers so that business operations could be as smooth as possible. But the type of forecasting technique being used should also be considered while using it. Each of the forecasting techniques could result in different predictions even with the same set of past data. It should be understood that there is not right or wrong prediction when it comes to forecasting. The purpose is to predict the future sales/numbers as realistically accurate as possible with the given set of past data under the conditions of seasonal, economic or political fluctuations that would influence the actuals.

The forecasted prediction not only just helpful in inventory management, but also helps in planning production activities. In case of beer, sufficient ingredients could also be planned well in advance and stocked when required. Stocks of these ingredients can also be managed up and down depending on predicted sales. This also helps in bargaining with suppliers in a way. If we can predict an increase in sales in say, three months from now, we can strike a deal with supplier now under less price assuring him a sale three months from now. Like this, there are number of operational advantages of forecasting.

There are qualitative forecasting methods as well. These are helpful when there is not proper historical data available to have and quantitative forecasting analysis. But these are a matter of opinion and are subjective in nature. Hence care should be taken while considering such qualitative techniques for predictions.

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