Demand planning Consensus Forecast BITS Pilani Pilani Campus Topics discussed

Demand planning consensus forecast bits pilani pilani

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Demand planning – Consensus Forecast
BITS Pilani, Pilani Campus Topics discussed in the Consensus Forecast Meeting are: 1. New product introduction : •. Initial inventory for new products were considered by sales director while forecasting. 2. Products to be kept discontinued : •. Consensus was sought amongst the groups as to how a products’ end-of-life cycle was to be managed. Consensus Forecast Meeting
BITS Pilani, Pilani Campus 3. On going products : Sell-in and sell-through rates were analysed along with inventory and compared with expected sales. Promotion and price change data were also analysed. 4. Providing feedback: Feedback on forecasting performance, emphasizing biases that the functional forecasts have displayed in past meetings. Consensus Forecast Meeting
BITS Pilani, Pilani Campus The next step involved validation by the finance and operations groups. If the finance group found revenue forecast unsatisfactory, then the business assumptions were changed which were reflected in the next Consensus Forecast Planning. The operations validation was conducted as the Master Production Schedules (MPS) were constantly sent to suppliers and their commitment were communicated back constantly. Final Consensus Forecast
BITS Pilani, Pilani Campus A 13-week forecasting accuracy was estimated for both the sell-in and sell-through inventory using the formula : Forecasting accuracy = (Sales – Forecast )/forecast 13 weeks was selected as the time frame as it was the longest contracted lead time in Leitax’s supply chain. Forecast accuracy metric
BITS Pilani, Pilani Campus The results after implementing the new forecasting methods are : 1. Three-month-ahead sell through forecast accuracy improved from 58% in the summer of 2003 to 88% by fall of 2004. 2. Sell-in forecast accuracy improved from 49% to 84% in the same time frame. 3. Excess and obsolesce cost decreased from an average of $ 3.1million in 2001-03 to zero in 2004 . Results
BITS Pilani, Pilani Campus There were two missteps after implementing the new forecasting method: 1. Over forecasting •. The SF-6000 was launched in the spring of 2004 as a high-end digital camera for professionals. •. It was the first camera in the market to offer a 8- megapixel and 10 X zoom. •. It was broadly reviewed in the consumer and photography press. •. This enthusiasm of the press was reflected in the forecast which led to it being over forecasted. Missteps
BITS Pilani, Pilani Campus 2. Cannibalization The ShootXL was introduced in April 2004, positioned at the low end of the professional market sold at $729. It became one of the best-selling digital cameras ever offered. The Optix-R was introduced in September 2004. It was modeled after ShootXL and sold at $459. The consensus forecasted ShootXL based on its impressive introduction and not account the possible cannibalization. Missteps
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