How to respond to this discussion reply. Forecasting is an essential tool making

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How to respond to this discussion reply.

Forecasting is an essential tool making orders and projects consumer demands for products. In the case of Kentucky Swamp Brew Beer, how I would use forecasting to help determine weekly ordering decisions is monitor the weekly sales and orders or retailers. Retailers sales and orders are indicators of consumers demands. The higher the sales and orders tells me there is a high demand for the product, therefore I would make plans to keep an inventory to continue to supply retailers. If sales and orders are low, I would not keep large inventories and scale down my orders to the manufacture

Explanation / Answer

It is always, not that simple that in case sales and orders are on the increase means consumers demand is also increasing and in case the sales and orders are low means demand is low. One needs to go beyond the numbers and try to pin points the reasons of increase or decrease in the sales and orders. It may not be the actual sales to the consumers, sales may be among the competitors for varied reasons. Consumers demands may be studied separately. It may not be changing much but your company's products sales are linked to the presence and or absence of your competitors products and their prices. At times consumer demands shifts to other products and vice versa as other products are not available or becomes costlier the demand of your products go up.Demands takes into account the complementary, supplementary and substitution etc. and calls upon study of very many other consumer behavior factors including price elasticity and income elasticity.

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