Business Forecasting Essay Example | Topics and Well Written Essays - 500 words

Business Forecasting - Essay Example The third step includes testing the predictability of a model while using the ‘out-of-sample data’, that establishes whether the model can fulfill its duty of predictability. Historical data is essential to predict the future demand. Even though the future data may fit the future data, it is not an assurance that the forecast in the future is accurate. Like in the carbonated soft drink study, the estimate went on for over 153 weeks, with the 13 weeks used as out of sample data. The increased lead times for some specific packaging components is due to the complicated process. Also, the surfacing of more than normal supply and demand issues force a change in the supply chain after only thirteen weeks of the entire plan. The scenarios The scenarios as analyzed in the case study include sensing demand, shaping demand and ways of maximizing Return on Investment. The sensing demand handles the measures the organization undertakes to increase volume in the retail business assoc iated with grocery. The scenario is imperative in demand forecasting because it ensures the production of enough products for existing customers. The firm concentrates on major business indicators, to push sales up thus increasing profitability. The third scenario associated with maximization of ROI, the organization researches on other scenarios that can help boost sales and promote productivity. Another fourth scene not mentioned in the case study, but remains important is to understand the consumer in terms of quality and quantity standards.