Question

Please, answer these question in details and examples about the role Forecasting plays. Demand Planning, Sales and Operations Planning, and even budgeting are most forecasting systems.

1- what were the strengths and weaknesses of their forecasting system.

2- Do you believe the weaknesses can ever be overcome? If so how? If not, why not.
The issues could be but not limited to management, corporate culture, or the nature of what is being forecast.

Answer 1

Q1) Below are the strengths and weaknesses of forecasting system -

Strengths

1. Provides future demand forecast based on historic data by using various analytical models or techniques

2. It helps the firm to think ahead of time to be prepared for the supply

3. Firm can predict any surge or drop in demand based on which it can plan its production.

Weaknesses

1. Limited data availability leads to inaccurate forecasts that mislead the firm

2. Forecast errors are difficult to account as increase in error value is considered as decrease of accurateness

3. Forecasting models which are used rely on multiple independent factors to predict the dependent demand.

Q2) Weaknesses in forecasting systems can be overcome to an extent as highlighted below -

1. By designing forecasting tools and models based on multiple iterations and indepth research on the trends and seasonality.

2. Using huge amount of data to make better approximates.

3. Cosnidering all the factors that affect the product demand into the forecasting model.