Find an example of a product you have recently purchased. Identify the logistics
ID: 419001 • Letter: F
Question
Find an example of a product you have recently purchased. Identify the logistics tasks that would have to take place in order for the product to be available for you to have the ability to purchase it. How many different forecasts do you think the retailer had to make in order to decide how much product to stock? What are the consequences for that particular retailer if they had over forecast versus under forecast? Identify a nontraditional business event, such as forecasting demand for t-shirts following the Super Bowl, or the amount of relief aid needed following an earthquake. What do you think would be the best way to forecast such an event - qualitative or quantitative - and why? What are the implications of forecast error on supply chain management?
Explanation / Answer
Answer:
Example of a product that we have recently purchased is HP laptop. This laptop we have purchased for our home usage by children.
Identification of logistics tasks that would have been taken place in order for the product to be available for us to have the ability to purchase it are as below:
Supplier to plant logistics: Raw material purchase from the suppliers to the HP laptop manufacturing organization. Then the assembly of the laptop is carried out at the HP organization.
Plant to Distributors logistics: The HP laptop lots dispatched to the regional distributor for distribution in the regional market for purchase by retailers/outlet shops. Some of the distributors are in global market and at international location, thus involves international dispatch of the laptop products.
Distributors to retailer/outlet shops logistics: The logistics required for dispatch of these laptop lots to the regional outlets shops/ retailers based on demand by the retailer or shop outlets.
Many different forecasts the retailer thinks in order to decide the quantity required to be stocked.
Personal knowledge of the market and demand seen in the market.
People feedback and interest in the HP laptops products helps in forecasting the quantity.
Retailer’s capability in making the sale in the given market.
The consumer network of the retailer helps in forecasting the stock quantity
The logistics setups in the region helps for forecasting the quantity required at the shop
The trend of the HP laptop in the region and any seasonal impacts have been reviewed by the retailer for planning the stock for the laptops.
The consequences for that particular retailer if they had over forecast versus under forecast than in this case the retailer will not be able to sell the products as per his forecast and he will have higher inventories at his shop which will impact the profitability of the retailer and engagement of fund for use in other products. Thus it will impact financially to the retailer.
Nontraditional business event -forecasting demand for t-shirts following the amount of relief aid needed following an earthquake: This is a nontraditional business event in which an earthquake has occurred and which generated demand for the t-shirt business in the particular market for the relief campaign.
The best way to forecast for such event is to plan additional quantity for the event based on its impacts on the public and understanding the event systematically. For this we need to understand the event completely as below
The impact of earthquake on the population
The target population being affected by the earthquake
The relief campaign being organized by government and other agencies
The capability of public for purchase of such t shirts for their family member’s relief and safety.
Adequate understanding of the event
Capability or lead time of the retailer business on how quickly they can purchase the t-shirts against the demand.
The speed of the logistics to support the demand in the given market.
This approach is best because the forecasting is being carried out with key factors like demand in the market, demand fluctuations and the back-p logistic supply chain process which can manage the urgent demand for the business. Thus all this factors can help to make the qualitative and quantitative forecasting for the t-shirt in the given market.
Implications of forecast error on supply chain management are as below
High supply chain cost if higher quantity are planned for the business.
Higher capacity readiness of supply chain against lower demand makes the wastage of resources
Lower forecast against high demand will result in not fulfilling the demand in the market, results customer dissatisfaction and losses business opportunities.
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