Aldi Forecasting

Forecasting is part of a company’s future planning as it attempts to estimate future demand for its product or services. Forecasting is usually measured in specific time periods (months, weeks, etc), given a desired level of accuracy, and assigned a unit of forecasting (sales in units or dollars) (Download Reports 2011). PepsiCo bases its sales forecasts on two main factors: changes in consumer tastes, particularly the rise health consciousness among consumers; and how legal regulations may impact operations, such more federal and local laws

The current demand forecasting method is based on qualitative techniques more than quantitative ones. If the forecast is not accurate, the company would carry both inventory and stock out costs. It might lose customers due to shortage of supply or carry additional holding costs due to excess production. If the actual demand doesn’t match the forecast ones, and the forecast was too high, this will result in high inventories, obsolescence, asset disposals, and increased carrying costs. When a forecast is too low, the customer resorts to a competitive product or retailer. A supplier could lose both sales and shelf space at that retail location forever if their predictions continue to be inaccurate. The tolerance level of the average consumer

* Now, assume you have acquired some time series data that would enable you to make short, medium, and long term forecasts. Ascertain the quantitative technique that will provide you with the most accurate forecast. Provide a rationale for your responses

* Forecasting is an impartial strategic ingredient that will ensure apt base for reputable planning. Our forecast is always the first step in developing plans in running the business along with our future plans of growth strategies. With this tool, we are able to anticipate our sales within reason that then can allow for us to control our costs in conjunction with inventory which will then help us to enhance our customer service. Sales forecasting is a vital strategic tactic in our company’s methodology.

Aldi Business report Date due - 27/11/15 Teacher - Mrs Waud Executive summary Business's are fundamental to the Australian economy, they serve a sole purpose of satisfying the needs and wants of consumers through the production of goods and services. A distinct business which not only operates in Australia but globally is Aldi, Aldi is a well established German company which not only prides it's self but is famous for delivering high quality products for low prices. • This business report will further outline the role of Aldi including the product and services in which Aldi bestows. • A swot analysis regarding the strengths, weaknesses, opportunities and threats which are in regard to the Aldi outlet.

Greaves provided five years and two months of annual sales data. Using Stat Tools, the following analysis were run: Moving Average, Exponential Smoothing Simple, Exponential Smoothing Holt’s, and Exponential Smoothing Winter’s. Following a comparison on the average on all models, the Exponential Smoothing Winter’s was found to be the most suitable model for the case. A graph

However, from the case study, it is difficult to do so due to two main reasons which are insufficient information and long production’s lead time. Information would slowly become more obvious when it approaches the peak season while the long production’s lead time is a constraint which prevents the company from producing at the point where adequate data are available. Therefore, to improve company’s performance, the first thing is to forecast demand more accurately from the first beginning. Wally now only based his first phase production decision on individual forecasts. However, from the exhibit 5, it shows how demand forecasts improve with increasing information. With the lack of information, Wally might take into account and use past statistical deviation between initial and final forecast, which is the closest to the real demand, when he makes a decision. In textile and fashion industry where things change rapidly, people who have more experience and close to customers are those who are most likely to accurately foresee the future trends. So inviting retailers, especially salesmen or shop managers, to help with the demand forecasting is a good idea (Giordano also used this effective strategy to forecast demand).

To find the "best practices" for forecasting, our team researched many cases of forecasting success, and found five companies with a common theme. Rayovac, the Coca-Cola Bottling Company, AAi. FosterGrant, the Sara Lee Corporation, and the Scotts Company all had major problems with forecasting, some of them very similar. To address and solve these problems each of these companies made major improvements to their forecasting

We can counter the concerns of both the sales and distributors by first convincing the barilla’s employees and the top management by creating trust within the organisation and with distributors by building long-term relationship. There needs to be a collaboration between barilla and the distributors so they can share the sales data with barilla who would then forecast and deliver appropriate amounts of products to the distributor at right time at the right place, Thereby distributors can lower the inventory and improve the services and decrease the distribution cost. We can convince the distributors about the benefits by running JITD

Moreover, the quantitative method is used by researches who want to discover statistics and facts by analyzing data in a numerical way. Unlike this article, the qualitative method is used by researches who want to gather data through observations and interviews based on what the participants say or do. The qualitative method seeks to explore and collect opinions and motivations on the research topic instead of collecting numerical data.

Before a new innovative product enters into the market Technology Forecasting is one of several methods used to determine if customers will buy it. The Technology method should always be used in conjunction with other tools to identify prospective customers, prototypes, focus groups, interviews, market testing, internet polls and other tools to get a better understanding of the market.

A Distribution channels between supplier and buyer is critical and needs to be under constant surveillance, the cost of inventory can be astronomical. A competitive advantage is reached when customers are able and willing to order under a just-in-time logistical partnership. This partnership begins with the manufacturer, which open channels with suppliers of raw material, and then flow into the distributor, which then sells directly to consumer. Brazil offers all of these attributes. According to Global Agricultural Information Network, “The food processing industry is the second largest sector among manufacturing industries in Brazil”. (Meat.2011) The channel will start with imports and exports distribution to the domestic market, where it is then sold to the retail and food industry channels before being sold to Hotels, Catering, Industrial Dining Halls, and other distributors.

Before, the concept of demand forecast was to serve the key functional groups in achieving their own interest. Facing the new challenges, forecast needed to be more accurate. And therefore it needed a new concept that is to have a consensus forecasting that would accurately reveal market demand and align the needs of key actors in the forecasting process. Leitax implemented two specific changes in forecasting process. The first one is to switch the focus from sell-in to sell-through and second one is to ignore capacity constraints.

Economists use the retail sales data in their models to make predictions on a wide variety of economic issues. Again, because retails sales accounts for such a large proportion of GDP, it is used along with other factors as a way to estimate the direction of the quarterly and annual GDP numbers. Used in conjunction with data such as the consumer price index, it is also very relevant for inflation forecasts as the data can offer glimpses into the affects of rising or falling prices. This in turn is closely tied to predictions for the direction of future interest rates as potential additional government action. Finally the retail sales data can be used to estimate

Thus, all in all, this paper supplements the idea of providing a reasonable overview of the implications of forecasting retail deposits in terms of its partition based on social scientific aspects.