Continue with analyzing feedback within your supply chain at EBBD. Forecasting i

Question

Continue with analyzing feedback within your supply chain at EBBD. Forecasting is based on projecting historical information into the future to provide some type of goal or expectation for system performance. Forecasting can also be based on qualitative reasoning and correlating factors. Regardless of how a projection is made, there will be forecast errors - the difference between what was predicted and the actual result. Forecast errors can be used as feedback to help improve future predictions. Consider that forecasting can be a feedback process. How would you use forecasting to help you determine your weekly ordering decision of Kentucky Swamp Brew? NOTE that this is a different question than what you are asked to do in Case 2 (improve the forecasting process for the whole of EBBD.)

Explanation / Answer

Forecasting would help any company to adjust it's order by using a comer complex algorithm than a simple EOQ model. By stabliching better probabilities of certain demand, orders size could be optimized, also SS and in that way reduce costs and inncessary inventory.

When the orders are made in weekly periods, forecasting is much more important. There might be a pattern, but continuously adjusting orders by new historical information is necessary because of market uncertainty.

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