Page 98 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Unit 4: Demand Planning and Forecasting

Results Achieved Notes
The automated platform and service provided by Suma Soft helped in significantly
decreasing the turn around time. The fast and efficient technical solutions has helped the
client to decrease turn around time, improve the quality of orders, significantly reduce
cost and decreased customer care cost.

Question
Analyse the case and write down the case facts.
Source: www.sumasoft.com

4.5 Summary

 An analysis of the factors that influence future values determines how future values are
estimated.
 Forecasting demand levels is a part of medium-term forecasts.
 A successful policy needs to be based on a fundamental understanding of what customers’
value.
 Demand levels and their timing greatly affect capacity levels, financial needs, and general
structure of the business.

 Supply chain forecasting concerns the spatial as well as variation of demand with time, the
extent of its variability, and its degree of randomness.
 Supply and demand reflect the time dimension.

 A forecast is an estimate of a future event achieved by systematically combining and
casting forward in a predetermined way data about the past.
 Different forecasting methods can be used to develop the forecast.

 A good model should have small error measures in both the estimation and validation
periods and its validation period statistics should be similar to its own estimation period
statistics.
 CPFR is forecasting based on the concept of supply chain management.
 Collaborative forecasting overcomes some of the inherent problems with traditional
forecasting.
 Collaborative Planning, Forecasting, and Replenishment is a nine-step approach to
improving supply chain management, and ties demand planning and supply planning
into one process.

4.6 Keywords

Causal: Causal forecasting is used when there is a visible correlation between one or more
variables to the demand for the product.
Collaborative Forecasting: Collaborative forecasting enables companies to transition from
periodic, disparate and isolated forecasting activities to a single, real-time enterprise forecasting
process.
Collaborative Planning Forecasting and Replenishment (CPFR): Collaborative Planning,
Forecasting and Replenishment, is a concept that aims to enhance supply chain integration by
supporting and assisting joint practices.

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