Hi, please write a response to the below discussion post for MBA 550 ASAP. Forec

Question

Hi, please write a response to the below discussion post for MBA 550 ASAP.

Forecasting is an important part of any business. Though not an accurate science, forecasting allows businesses to make predictions for the future of the company. Without forecasting, many businesses may not prosper and grow as they should. With a future position in management, I would use forecasting in order to determine the amount of stock we have as to not over or under order supply if we are selling a product. Another important forecasting decision I would make is the staff. Often times, a company is under staffed for the amount of supply and demand present. It is important to be able to predict the number of employees the company needs in order to be successful. An example of this particular forecasting model would be many retail stores during the holiday season. A company will hire more staff specifically for the holiday season in order to be able to support the amount of supply and demand they will have over the holiday season. In order not to lose money on supply, this portion will also be forecasted, as aforementioned.

Explanation / Answer

Yes, the above statement is absolutely true.

Firs let us understand the forecasting. Forecasting means estimation or prediction.

Let us understand it with an example- Suppose for a festive season a food company has not done any estimation and produced 100,000 pcs of biscuit. In normal month the sale is about 50000pcs. Now the festival comes here the two situations will be there either the stock will be sold or not sold. If it is sold then due to lack of supply company will face sale loss as well as customer loyalty. And if the product is not sold then it will lead to expiry and damage leading to problems with vendors and retailers. In both the cases the company will be in loss hence a estimation is very necessary. Suppose the company has estimated using different methods that how much sale is going to be in the festive season and they have aligned their production as per their result then the stock will not be out or expiry would not be there.

Here is some more importance of Forecasting-

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