At LULULEMON, marketing of women's apparel makes a sales forecast by developing a sales force composite....

At LULULEMON, marketing of women's apparel makes a sales forecast by developing a sales force composite. Simultaneously,operations makes a forecast of sales based on past data ,trends,seasonal components.The operations forecast usually turns out to be 20% less than the forecast of the marketing forecast. What is the best forecasting method for LULULEMON to use in this situation?

Expert Solution

It is obvious that LULULEMON is using the sales force composite method (qualitative method) and time series analysis (quantitative data) based on past data, trends, seasonal components. Since the operational forecasting is 20% lesser than the forecast of the marketing forecast, the company now need to use Regression Analysis. The reason Regression analysis is chosen among all other forecasting methods are:

- Regression Analysis is a statistical process hence the data would be accurate

- It is popularly used in sales forecasting.

- Provides comparison between company sales and other factors. It helps to measure the degree of association between these variables.

- Sales fluctuations are analyzed by fitting an equation related to variables. This helps to analyze the difference of 20% between the sales composite forecasting and operational forecasting.

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keosha answered 3 months ago

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