Stock Control and Forecasting Techniques Used by Cadbury

I am going to relate the stock control and forecasting techniques that

Cadbury use.

C3: The relationship between stock control and forecasting techniques

Used in the production methods employed

For this part of my assignment I am going to relate the stock control

and forecasting techniques that Cadbury use with the production

methods that Cadbury use.

When Cadbury buy stock, it has to be considered carefully by Cadbury,

the correct quantities of the stock should be purchased to reduce the

amount of wastage should be controlled so that loses are controlled.

Cadbury purchases its main ingredient cocoa beans from Ghana, which is

then taken to marlbrook where the cocoa beans are cleaned and

grounded. After this they are imported to the UK in the Bourn Ville

factory where the production of the product is completed.

Cadbury knows how much stock that has to be purchased due to the time

series analysis that is done. The time series analysis shows

historical data which Cadbury use to analyse and predict the future

trends of the sales of products.

This is the reason for why Cadbury needs to ensure that the time

series analysis is accurate and up to date so that Cadbury can produce

enough products so that there is no wastage or shortage of products,

this is also meeting the customers demands. If Cadbury decided to

purchase more stock than needed then Cadbury would be overspending its

money and the wastage figure is likely to increase because more

products than needed are being produced and it would be wastage

because if the trend continues that the time series analysis shows

then customers are less likely to purchase more products (Cadbury

would be purchasing more products than customers would purchase).

Retail pricing

Once the product is made, Cadbury have to price the product at a

competitive price for it to be sold at retail shops. The price of the

product has to be competitive and stay stable so that customers will

purchase the product without considering the cost as a drawback about

the product.

For example if Cadbury decided to lower the price of the product by

25% then the sale trends are likely to change and the amount of stock

purchased has to be increased as well, because if the price of the

product decreases then it is very likely that customers are going to

be purchasing the product more often during the set time period that

the time series analysis covers. However if Cadbury decided to

increase the price of the product then it is very likely that

customers are less likely to purchase the product hence less stock

would be needed because Cadbury would have to produce less products.