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Running head: FORECASTING AND SUPPLY CHAIN MANAGEMENT ATDECKERS OUTDOOR CORPORATIONMercy GobedeGSB 901413Module 4 Assignment: Forecasting and Supply Chain Management at Deckers OutdoorCorporationOSM 5122 / Global Operations ManagementUniversity Of Zambia, Graduate School of BusinessInstructor: Dr. Danielle Babb14 June, 2020Forecasting is an imperfect science, but it is also a necessity for most businesses 1
Running head: FORECASTING AND SUPPLY CHAIN MANAGEMENT ATDECKERS OUTDOOR CORPORATION(Randolf, 2019). This is particularly true when it comes to supply chain management. Krajewski et al (2015) observed that forecasting is good for both managing processes and managing supply chains. Proper forecasting helps ensure firms have enough supply on hand to satisfy demand. Business analysts use supply chain management systems and other tools toforecast demand weeks and months in advance.An overestimation of demand leads to bloated inventory and high costs. Underestimating demand means many valued customers will not get the products they want.As a result, businesses have to be on point when it comes to meeting the demand of its customers and ordering the supplies needed to do so. An overestimation of demand leads to bloated inventory and high costs. Underestimating demandmeans many valued customers will not get the products they want. Supply chain managementis therefore the process by which a company ensures it has just enough supply to meet demand (Randolf, 2019). This paper therefore discusses the forecasting and supply chain management at Deckers Outdoor Corporation. Forecasting Process at Deckers Versus Typical Forecasting Process According to Krajewski et al (2015), a typical forecasting process is done monthly and it consists of structured steps. The steps are facilitated by people such as demand manager, forecast analyst and or demand or supply planner. The first step of a typical forecasting process starts by adjusting the history file and reviewing forecast accuracy. This step is very similar at Deckers’ forecasting. Evidence from the case indicates that “Bottoms-up forecasts for each SKU begin by analyzing any available history files of past demand” (Krajewski et al, 2015, p.333). However, due to the different types of products, Deckers’ forecasting is not always done the same way. Especially products that are completely new designs that are fashionable with no past history, this step is 2
Running head: FORECASTING AND SUPPLY CHAIN MANAGEMENT ATDECKERS OUTDOOR CORPORATIONirrelevant. For this type of product judgment methods are the first step in the forecasting process. However, the first step of a typical forecasting process corresponds to Deckers forecasting process.