A1: An evaluation of the effectiveness of the techniques used by the business to plan production and
Cadbury plan their production process by using a time series method as this helps Cadbury to accurately produce the needed amount of chocolate at the correct period of time. A time series shows historical data that can be used and analysed to predict future trends. Christmas and Easter are peak selling times for all chocolate manufactures including Cadbury, this is obviously because chocolate products make good gifts for these occasions.
The disadvantages of this type of forecast are:
- Cadbury need to have a lot of past data in order for the time series method to be used accurately to predict sales figures.
- If the external environment doesn’t stay stable then there will be problems with the forecast for example if the prices of the raw materials used to produce Cadbury products increases then the price of the product has to increase in order for Cadbury to make a profit from the product produced. This may affect the customers purchasing trends.
- The data may be biased or representative.
The advantages of this type of forecast are:
- The data helps Cadbury to reduce wastage and produce the amount of products that customers would purchase.
- The data is reliable if collected properly/accurately.
- The forecast helps Cadbury to make products efficiently as it helps Cadbury to set a target of the amount of products needed; there are always enough products to supply to customers.
However precise information about this is not available to the public. Therefore I am going to use the information that I have produced about an imaginary firm I have used in E4 of my assignment.
The most profitable product that the imaginary firm produces is the mugs, making a profit of £10,500 for...