Sample Management Paper on Supply Chain Forecasting

Supply Chain Forecasting

Maintaining the exact volumes of products in stock is important for every business. To forecast supply, managers use data from their previous supplies to gain insights and an understanding of the demand. Supply forecasting enable the managers to formulate informed decisins for ther business as per as stock inventory, cargo booking or budget planning are concerned. Forecasting in supply chain enables managers to know when they are supposed to order products and how the products should be whether raw materials, semi-manufactured, or fully manufactured products. Forecasting also involves analysis of demand to know how willing your customers are in purchasing your firm’s products. The aim of this paper is to give an overview of supply chain forecasting methods.  supply chain forecasting is important to professional managers and other people like me because it helps them make orders on time, avoid unnecessary inventory expenses as well as plan for price changes.

Overview of forecasting  methods

There are two main methods of forecasting in the supply chain; quantitative and qualitative forecasting methods. The quantitative forecasting methods depend on the historical data to estimate future sales while the qualitative relies on the insights, expertise, and experience of those involved in the firm.

Straight-line method:

The straight -line method isa simple forecasting method that uses the historical informtionas well as trends to estimate the future  revenue growth rate. This mmethod is moskly used when a firm is experiencing a growth periods and at the samentime expecting increase in sales. The straight-line method is computated by loking for the pastrevenue growth and applying itto the future opratin. The method considers the esxtence period of the business beging from when the business was established up the wthe time the metod is been calculated. Straight-line forecasting method assumes that the sales of a firm will continue to increase.hovwever,the straight-line method has limitations in that it does not consider some variables such as seasonality, and potential short-ten economicfactors.

Moving average method

The moving average is a forecasting method that looks underlying sequences of data to estimate the future values. The mving average method and the the straight-line method are almost the same only the te moving average  looks at sections instead of the entire set of thehistoical data. The moving verage method only accounts for a particular set of information that is perceived tobe of great importance to thefirm.  Furthermore, the movng avvarage method putsinto consideration only the perid that is required brackets. For this method to make sense and to be understood easily, it mst be plotted on a graph for one to see te trends.

Multiplier linear aggression

The multiplier linear aggression is a forecasting method that is used tto estimate  the outcome of one varible based on the values of multiple variables. It is an extension of simple linear regression that compateres several independent variables to predict the expected value. The mutipier linear aggression among the most reliable forecasting methods since it puts int acvount not just single variable but several independent factors. This method give more accurate predictions about consumer behaviour as well as future marketing expenditure.

Linear aggression area

The linear aggression area estimstes the value of a dependent variable based on the value of independent variable. The linear aggression area method predicts the coefficient of a linear equation