What are some of the principles organizations can observe to improve their forecasting process?
What will be an ideal response?
(See Table 8.2 in the text.) Some principles organizations can observe to improve their forecasting process include:
1. Better processes yield better forecasts
2. Demand forecasting is being done in virtually every company, either formally or informally. The challenge is to do it well—better than the competition.
3. Better forecasts result in better customer service and lower costs, as well as better relationships with suppliers and customers.
4. The forecast can and must make sense based on the big picture, economic outlook, market share, and so on.
5. The best way to improve forecast accuracy is to focus on reducing forecast error.
6. Bias is the worst kind of forecast error—strive for zero bias.
7. Whenever possible, forecast at more aggregate levels. Forecast in detail only where necessary.
8. Far more can be gained by people collaborating and communicating well than by using the most advanced forecasting technique or model.
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What will be an ideal response?
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