Importance of Demand Forecasting in Supply Chain Management

Design a supply chain to support an organizational strategy.

All operational activities begin with an estimate of what customer demands will be. Production schedules, modes of transportation, warehouse space, and other supply chain activities are all dependent on the accuracy of the company's demand forecasting. The information management system must provide thorough, accurate, and timely information so that supply chain managers can prepare and execute short and long-term plans. Satisfying the customer is the No. 1 challenge for all demand forecasters. By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

Describe an organization's business model.

Explain an organization's supply chain strategy.

Competency 2: Improve efficiency in the supply chain.

Analyze the global challenges that an organization faces in its supply chain.

Explain the importance of aggregate planning to an organization's supply chain and its partners.

Describe the role demand forecasting plays in an organization's supply chain strategy.

Explain how pricing promotions are used to change demand.

Competency 4: Communicate in a professional manner that is consistent with the expectations for supply chain managers and participants.

Exhibit proficiency in writing, critical thinking, and academic integrity by appropriately attributing sources.

To deepen your understanding, you are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of the business community.

For the following questions, refer to Fujitsu Limited's case study, "Sony Marketing (Japan) Inc. Customer Success," listed in the Resources.
 
What is the role that demand forecasting plays in Sony's supply chain strategy?

What factors make a demand forecasting strategy necessary, and how is Sony able to be more responsive to its customers due to this SCM strategy?

For the following questions, refer to Hitachi Consulting's article, "Six Key Trends Changing Supply Chain Management Today: Choosing the Optimal Strategy for Your Business," listed in the Resources.

From your perspective, what are the two most important trends from the list of six?

Why do you feel it has the most impact on supply chain management today?

What is a real life example of a company that has been impacted by each of the two trends that you have selected?

The following optional resources are provided to support you in completing the assessment or to provide a helpful context. For additional resources, refer to the Research Resources and Supplemental Resources in the left navigation menu of your courseroom.

The following e-books or articles from the Capella University Library are linked directly in this course:

Blanchard, D. (2010). Supply chain management best practices (2nd ed.). Hoboken, NJ: Wiley.

Bhatnagar, A. (2009). Textbook of supply chain management. Lucknow, India: Word-Press.

Drake, M. (2011). Global supply chain management. New York, NY: Business Expert Press.

Greeff, G., & Ghoshal, R. (2004). Practical e-manufacturing and supply chain management. Oxford, England: Newnes.

Farooqui, S. U. (2010). Encyclopedia of supply chain management: Volume I. Mumbai, India: Himalaya Books Pvt.

Farooqui, S. U. (2010). Encyclopedia of supply chain management: Volume II. Mumbai, India: Himalaya Books Pvt.

Farooqui, S. U. (2010). Encyclopedia of supply chain management: Volume III. Mumbai, India: Himalaya Books Pvt.

For this assessment, consider that you work for a company that develops and sells case studies and case study analyses. Your company's primary customers are colleges and universities wanting to use them within their courses, but your company also has customers using them for management training and development. Your manager asked you to conduct research and develop a case study analysis. She's specifically interested in you doing the analysis on one of the companies from this list:
L. L. Bean.

Amazon.com.

Starbucks.

Intel.

Research and write about the company that you have selected from the above list.

You and your manager discussed the high-level outline of your analysis and agreed you should address the following items. As the basis for your research, you can use any of the resources noted in this course, in the Capella library, and on the Internet:

Describe the organization's business model (particularly related to their supply chain strategy) and provide a diagram or visual to explicitly describe that same business model.

Compare and contrast the organization's supply chain strategy with another organization's strategy.

Analyze the global challenges the organization faces in its supply chain and discuss strategies to minimize the challenges.

Explain and validate the importance of aggregate planning to the organization's supply chain and its partners.

Analyze the role demand forecasting plays in the organization's supply chain strategy.

Analyze how pricing promotions are used to change demand.

Based on the intended audience, your report should be well organized and written in clear, succinct language. Target 800–1000 words. Attributing sources in your professional and academic work supports your analysis and conclusions and demonstrates ethical behavior and academic honesty. Following APA rules for attributing sources provides consistency and ensures that readers can locate original sources if desired.

As a reminder related to using APA rules to ensure academic honesty:

12.When using a direct quote (using exact or nearly exact wording), you must enclose the quoted wording in quotation marks, immediately followed by an in-text citation. The source must then be listed in your references page.

13.When paraphrasing (using your own words to describe a non-original idea), the paraphrased idea must be immediately followed by an in-text citation and the source must be listed in your references page.