Many companies use forecasting to determine product/service demand. However, forecasting can be very inaccurate. Some companies report forecast errors as high as 30% - 40%. Your company current uses a time series analysis to predict demand.
1. Do you feel that your company would benefit from using forecasts even if they experienced forecasting errors in the 30% - 40% range?
2. Discuss some potential causes of forecast errors.
3. Provide an example of a product/service that your company could provide in which a time series analysis would be appropriate.
4. Provide an example of a product/service that your company could provide in which a time series analysis would not be appropriate.
5. How would implementing a JIT system help alleviate the need for a highly accurate forecasting system?
1. My company would benefit from using forecasts even if they experienced forecasting errors in the 30%-40% range. My company makes plastic molded toys. It is important to know which types of toys will sell. Even if the forecasts have between 30% and 40% errors the information will be useful in production planning. In my company, the forecasts are made based on information received from distributors. In several years, the forecasts have been off target by more than 50%. The result is large stocks of unsold inventory that leads to losses for the company. From this point of view even if the forecasts are off by between 30% and 40% they provide a good guide for production planning.
2. Some potential ...
The answer to this problem explains issues relating to forecasting in business. The references related to the answer are also included.
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****My business for this assignment is to open my own Photography Business specializing in newborn photography****
Financial forecasting is important because it adds discipline to the way an entrepreneur thinks about the venture. Forecasting helps determine cash needs and timing of these needs. It also helps the value of the venture. Thus, the financial forecasting is critical to the success of your business plan.
The cash flow forecast is arguably the most important part of the plan, but each of the other documents is important from a planning perspective. There are three sections in a financial plan i) the Starting Balance Sheet, ii) the Pro-Forma (or Forecast) Income Statement, and iii) the Cash Flow Forecast.
explain your approach and the steps you have taken in order to build the forecast of the short, medium, and long term financing needs.
1) What might the sources of financing of your chosen plan be? Please Explain.
In the course of preparing your paper, you will probably want to think about, among other things, the points such as:
-Sources of financing (e.g., angel financing)
-Preparing pro-forma financial statements for lenders (e.g., Balance Sheet and Income Statement)
-Describe methods of forecasting the future financial needs of the enterprise
-Evaluate a set of assumptions regarding investment required, projected sales, profit margins and credit on the financial projections of a business firmView Full Posting Details