Translating Demand Forecasts Into a Firm’s Plans

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Demand forecasting, a crucial management process, is significantly impacted by the coordination and planning efforts between the marketing, supply chain, and financial divisions. The annual revenue estimates that budgets are based on are virtually out of date as soon as they are finalized, even though they traditionally have played a significant part in organizational planning (Murphy, n.d.). As a result, in most businesses, demand predictions have taken the place of the budget as the main tool for planning and coordination. Thus, the paper aims to identify how a manager should translate demand forecasts into a firm’s plans.

One of the strategies is using judgment to adjust the values of a quantitatively derived forecast will reduce its accuracy. Forecasters should rely more heavily on the output of a quantitative prediction rather than their judgment (Lowe, n.d.). Applying judgment in such situations should be done on a structured basis rather than on an intuitive basis. The manager also can achieve that through market research to produce a precise picture of demand, and this qualitative approach uses customer surveys. When mailing client surveys, considering demographics and location is crucial (Rheude, 2020). A random sample will not be much assistance because the data should be pertinent enough to be used in formulating a plan. Another qualitative technique that depends on the perceptions of the sales teams is sales force projection.

Each sales associate should assess their territory and relay the specific needs of their clients. These data sets are combined to create a realistic demand prediction (Rheude, 2020). A quantitative technique called trend projections functions well, with a sales history of around two years (Rheude, 2020). A sequence that makes a demand estimate based on previous product sales is produced by analyzing historical sales data. In turn, the barometric quantitative approach uses data from the present instead of trend projections (Rheude, 2020). Demand forecasts can be made using this data by looking at specific economic variables.

Overall, a sales Manager can translate demand forecasts into a firm’s plans through market research to produce a precise picture of demand, and this qualitative approach uses customer surveys. Two qualitative and two quantitative techniques help create a demand estimate based on previous product sales and analyze historical sales data. Demand forecasts can be made using this data by looking at specific economic variables.