demand forecasting
How to develop an Effective Scientific Retail Demand Forecast?
Purpose of the Forecast
The ability to effectively forecast demand is critical to the success of a retailer. In this hyper competitive environment of ever diminishing margins, every paisa saved or earned is critical. A robust demand forecast engine, can have significant impacts on enhancing both top & bottom lines.
In today’s world, the retailers require forecasts that would be instrumental in directing the organisation through a minefield of capacity constraints, multiple sales geographies and a multi-tier distribution channel.
Demand forecasting helps understand key questions viz. which market would place demands for which specific type of product, which manufacturing unit should cater to which retailer, how many product units are required in a given season etc.? Given the sophisticated tools & techniques available today, all retailers should replace gut based decision making, with scientific forecasts. The benefits, throughout the lifecycle of the analysis will far outweigh the one time set up and ongoing maintenance costs. There is a lot of value in answering these questions through scientific methodologies as compared to educated guesses, or judgmental forecasts.
Business Benefits
Scientific forecasting generates demand forecasts which are more realistic, accurate and tailored to specific retail business area. It facilitates optimal decision-making at the headquarters, regional and local levels, leading to much lesser costs, higher revenues, better customer service and loyalty.
Range of Business Users
Traditionally, only the sales department has used forecasts, but in evolved markets the usage of forecasts is now pan organizational. Sales Revenue Forecasting, Marketing & Promotion Planning, Operations Planning, Inventory Management etc. also extensively use sales forecasts. Indian retail needs to imbibe this discipline as their scale of operations grows larger and they are
Purpose of the Forecast
The ability to effectively forecast demand is critical to the success of a retailer. In this hyper competitive environment of ever diminishing margins, every paisa saved or earned is critical. A robust demand forecast engine, can have significant impacts on enhancing both top & bottom lines.
In today’s world, the retailers require forecasts that would be instrumental in directing the organisation through a minefield of capacity constraints, multiple sales geographies and a multi-tier distribution channel.
Demand forecasting helps understand key questions viz. which market would place demands for which specific type of product, which manufacturing unit should cater to which retailer, how many product units are required in a given season etc.? Given the sophisticated tools & techniques available today, all retailers should replace gut based decision making, with scientific forecasts. The benefits, throughout the lifecycle of the analysis will far outweigh the one time set up and ongoing maintenance costs. There is a lot of value in answering these questions through scientific methodologies as compared to educated guesses, or judgmental forecasts.
Business Benefits
Scientific forecasting generates demand forecasts which are more realistic, accurate and tailored to specific retail business area. It facilitates optimal decision-making at the headquarters, regional and local levels, leading to much lesser costs, higher revenues, better customer service and loyalty.
Range of Business Users
Traditionally, only the sales department has used forecasts, but in evolved markets the usage of forecasts is now pan organizational. Sales Revenue Forecasting, Marketing & Promotion Planning, Operations Planning, Inventory Management etc. also extensively use sales forecasts. Indian retail needs to imbibe this discipline as their scale of operations grows larger and they are