Business Management
Supply chain management is a process conducted by several business entities, which involves planning, implementing and controlling any production and supply activities, with an aim of providing it to consumers in efficient ways. While supplying, there are intermediaries who play a role in connecting producers and consumers, who ensure efficiency in the supply chain too. Supply management is done to ensure collaboration between the intermediaries (Catholic Relief Services, 1999, pg 14). Planning and control system aids in define rules under which the business operates and within a given set of resources. Planning and controlling department depend on the information given by supply department for effective control of the business (Muehlen, 2004, pg 35).
Primary forecasting techniques
For a product-producing firm, it often uses primary forecasting techniques to determine the amount of goods demanded in the near future, with several quantitative and qualitative techniques initiated. Qualitative techniques involve rating schemes from informed judgment, and this technique is used, by top-sales executive or top management, to forecast a given trend in the market. Qualitative method also known as subjective technique or management judgment, and usually depends on the relationships between suppliers and consumers. Quantitative technique involves forecasting using the current, available resources. Forecasting techniques chosen by the firm depends on the usefulness of the information to the business, nature of forecast decision, important of the forecast, time available for the forecast and the usefulness of the available information that will enable the forecast. These techniques include; chain-ratio method to develop a forecast (sales forecast), Delphi method of forecast, executive method of judgment and sales-force composite method of forecast (Zimmerman, pg 73).
Chain-ratio method
Sales forecast method is a quantitative technique of forecasting, used to tell supply chain of products effectively, until it reaches the consumers. It helps the management to determine the extent of supply at each level, and directives in the entire chain process. Chain-ratio forecasts manage stocks at various levels, schedule for all available resources at the various link levels and manage the available stock at various levels. Accurate forecast of chain-ratio technique implies proper management of stock supply, hence proper management of supply chain process by the management. It, also, enables the management to determine various alternative techniques to use to make the supply chain effective.
Delphi method of forecast
It is a qualitative technique of forecasting. It involves ideas of top management and their predictions, which are put into consideration and conformity to a highly structured form of mechanism. Top management asks questions via questionnaires concerning expected future sales, which anonymous person compiles the data and determines what is to be expected in the later days, depending on information from top management. It is necessary for the business, as it helps to forecast demand of a given commodity over a long period, and appropriate when there are no unique, or no data available to predict demand trend.
Executive method of judgment
It is a qualitative technique of forecasting, and the most used method, by top management of a business, to predict future judgments. Top executives from different departments come together and gather their information about a certain product, and tend to predict its chain of demand as one unit. Executives use historical at hand to come up with predictions about the upcoming products in the market. It is essential to a business while making short-term predictions about demand of a new product in the market.
Sales-force composite method
It is also a qualitative method of forecasting and predicts demand patterns of business's product, depending on how the suppliers are well-known with the customers, existing market trends, demand and competitions. This forecast enables the sales person to set goals and boosts them to achieve the desired levels (Hutt and Speh, 2009, pg 143-144).
Impacts of production plans to business budget
Short-term and long-term plans of a business play a leading role in determining the effects of its budget. Short-term plans are short and precise, while long-term plans are long and take more...
Supply chain management in FMCG sector Fast Moving Consumer Goods (FMCG) Managing supply of FMCGs Demand and Supply Distribution Channel Traditional channel of FMCGs distribution National Vs Global Presence Products and Services Supply chain opportunities Usage of Supply Chain Management Business development Business performance Cost reduction Revenue Increase Inventory management Overall Business Performance Competitive advantage Future trends Issues in global supply chain management: FMCG sector Multi-channel Supply Chain Management Individual Tagging The FMCG sector is represented as manufacturers and distributors of packaged products. They are also coupled with mega retail brands
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