Customer as a result the further up the supply chain

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International Financial Management
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Chapter 9 / Exercise 3
International Financial Management
Madura
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customer. As a result, the further up the supply chain an enterprise exists, the higher the forecast error. Collaborative forecasting based on sales to the end customer can help enterprises further up the supply chain reduce forecast error.
Diff: 2 Topic: 7.2 Characteristics of Forecasts AACSB: Reflective Thinking Skills Learning Outcome: Describe major approaches to forecasting 7-20
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International Financial Management
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Chapter 9 / Exercise 3
International Financial Management
Madura
Expert Verified
3) Explain the four types of forecasting methods. 4. Simulation: Simulation forecasting methods imitate the consumer choices that give rise to
demand to arrive at a forecast. Using simulation, a firm can combine time series and causal methods to answer such questions as: What will the impact of a price promotion be? What will the impact be of a competitor opening a store nearby? Diff: 2 Topic: 7.3 Components of a Forecast and Forecasting Methods AACSB: Reflective Thinking Skills Learning Outcome: Describe major approaches to forecasting 7-21
4) Explain the basic, six-step approach to help an organization perform effective forecasting. Answer: The following basic, six-step approach helps an organization perform effective forecasting: 1. Understand the objective of forecasting. The objective of every forecast is to support decisions that are based on the forecast, so an important first step is to clearly identify these decisions. Examples of such decisions include how much of a particular product to make, how much to inventory, and how much to order. All parties affected by a supply chain decision should be aware of the link between the decision and the forecast. Failure to make these decisions jointly may result in either too much or too little product in various stages of the supply chain.

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