Sales forecasting management

Harrison, R, 1967. Exponential smoothing and short-term sales forecasting. Management Science, 13(11), 821-842. 

Fig. 4.6 Sales forecasting management proposed by Mentzer and Davis (2007)...

Mentzer T, Davis D (2007) Organization factors in sales forecasting management. Int J Forecasting 23(3) 475 95... 

Mentzer T, Moon M (2005) Sales forecasting management a demand management approach, 2nd edn. Sage, Thousand Oaks... 

The way many companies identify resource requirements is to solicit resource budgets from each department covering a 1 to 5 year period. However, before the managers can prepare budgets they need to know what requirements they will have to meet. They will need access to the corporate plans, sales forecasts, new product development plans, marketing plans, production plans, etc. as well as the quality policies, objectives, and procedures. 

Forecasting and sales planning Sales order management... 

A forecast is not a forecast is not a forecast. As companies work on demand architectures, they will find that they have multiple forecasts—sales forecast, financial forecast, production forecast, supply chain forecast, and procurement forecast—each with a different data model, granularity, and bias. As a result, tight integration is not a good idea and the so-called one-number forecast is not realistic. Instead, as companies work through the issues, they will find the need to model market demand in a ship to or channel data model, and translate this demand to a ship from data model. The sales forecast then becomes an input into the corporate forecast, and this corporate forecast becomes the input into the financial forecast. These concepts require education and are often a major change management issue. 

The plan calls for a sales price of 100 with an attractive gross margin before distribution costs of 40. Distribution costs add 10 per unit to the cost. It is likely that the supply chain manager is measured on whether the costs of distribution meet the 10 expectation. The first year sales forecast calls for 100,000 units, producing expected revenues of 10 million. However, this is an innovative product, so actual demand is uncertain. Demand, in the case of the widget, may in fact be significantly more or less than the forecast of 100,000 units. 

Figure 27.2 illustrates the relationship between departments, activities, and products. This is the case of Old Line. Old Line has three products A, B, and C. It is Product B that supports the supply chain with High Tech and Process Products A and C are sold elsewhere. Old Line has two departments Department 1 has three activities and Department 2 has one activity. Three of them — Activities 4, 6, and 7 — are part of Product B s supply chain. Product B does not require Activity 5. Old Line budgets by department thus, managers in each department use sales forecasts for all three products to estimate the resources they will need. 

Thomassey, S., 2010. Sales forecasts in clothing industry the key success factor of the supply chain management. Int. J. Prod. Econ. 128, 470—483. 

Planning/control level Inventory management Sales forecasting stock control tracking and event control... 

Collaborative Planning, Forecasting and Replenishment Channel partner cooperation Technology application Material/product visibility Automatic replenishment Joint sales forecasting Action matches with variance Network management... 

Finding solutions to these impediments and eliminating what becomes the Achilles heel of supply chain management requires a rigorous effort to improve sales forecast accuracy. That starts with the realization that most sales forecasts are based on history, adjusted by sales predictions. 

The final movement is to the area of management tools where control is really exercised. Here, point-of-sale support can be initiated to help with unusual customer requirements — shortfalls in capacity, current or expected bottlenecks, or any other problem that needs special attention. Marketing needs the data to analyze and compare with plans established many months before. Adjustments can be made, promotions planned, or changes made to products in development. Sales forecasting should also be adjusted based on what is actually occurring at the front end of the system versus what was expected. Planning and control must be made aware of current order status, particularly to track and anticipate any surges or shortfalls that will impact capacity requirements. 

One Family All Families Reconcile Sales Forecast Integrated Sales and Marketing Process (Demand Management) ... 

---