Introduction
Based the principle that easy and friendly to apply this model in practice to forecast C1 product of MAD Ltd, especially provide information for the people that don’t equipped with any skills on VBA and forecasting knowledge. This model using solver, Holt-Winters forecasting method and VBA to achieve automatically calculation to obtain the result of next quarter or next whole year forecast.
This report will first give a guidance on how to use this model and the accuracy of this model. Then illustrate what is forecasting system, computer programming and VBA and how these theory apply in this model. Finally, indicated the maintain process of this model, and the limitations of this model if user want to conduct further process
Guidance of this forecasting model
In order to obtain accuracy amount of C1 product of next quarter, manager should insert the observation data of current quarter of C1 amount first by click the bottom at the front of the excel. Then it will ask user to insert the data of current quarter sales amount. Tap in actual number of current quarter sales amount, then excel will ask user to make sure the data had been taped in is correct, if its incorrect, model will be exist automatically, user should press the bottom again to insert correct data. If the data had been inserted is correct, excel will show up a result output box which is due to excel running solver to minimum error of forecasting error. Finally, excel will come out a message box of C1 product of next quarter forecasting amount and forecasting total cost.
As the data is updating quarterly, update current quarter sale units will improve the accuracy to predict next quarter sales unit. This model assumes MAD Ltd will forecasting next who...
... middle of paper ...
...ghly simplified and automatic. Based on setting, it fit to MAD Ltd Company for long-term running without complicated input steps and frequent maintaining activities.
However, there still exit certain disadvantages. As this model mostly is provide figures, which hard to compare and illustrate errors among actual observation, quarterly forecast and annually forecast. Therefore, using line graph could clearly illustrate the tendency and differences among these variables. User have to change the data of the line graph that are provided in excel file.
Based on MAD Ltd Company’s C1 product situation, design this forecasting process to gain optimise result to forecast C1 product face to people from different background. For future work, this model could also apply for other products that have trend and seasonality, to improve their accuracy and reduce operation cost.
The projections were done for the years 2014-2018 (5 years). This timetable is the one softly set by the possible new ownership group to build and resell the business. Also, after five years it was felt that the accuracy of the projections could come into question.
Table C projects the break even analysis in both units and dollars as a basis for further projections. As seen in Table C substantially larger sales are required to break even.
Sales growing at a faster rate than cost of goods sold. Projected FY4 and FY5 also had projected sales growing faster than cost of goods sold. See graph for details (Derived from Exhibit 1).
Burns Corporation is an auto corporation that consists of 24 dealerships selling foreign automobiles in the United States. Burns has experienced an increase in their inventory, which is becoming costly and cutting into profits. Inventory costs total approximately 300 million dollars with a 3% finance charge. Recently, however, inventory costs have peaked at 360 million dollars and finance charges have reached approximately 750 thousand dollars monthly. As inventory grows due to misalignment of sales and merchandise ordering, so does the need for more accurate forecasting models. The manufactures have issued a "turn and earn" approach that affects how dealerships will be receiving their inventory. This change states that shipments will be based on inventory. The only way new models will be received is when other models are sold. Burns needs an analysis model that will assist them in future inventory decisions. The development of this model and what is should entail seems to be the main priority.
£ - Premier Inn revenue 1.822 mil. £). Managing the rising demand is the main challenge if they want to maintain their leading position and rising popularity in the market. In annual report it has been stated that insufficient reservation system and failure, caused business interruption, process failure and financial loss and taken given place in Principal Risks and Uncertainties section in annual report. ( annual report andreas risks) This essay will mainly focus on the importance of demand forecast and management in Hotels Industry by using Premier Inn Data and concentrate on the possible improvements can be achieved through Advance Booking Methods in Forecasting Hotel Reservations.
In order to forecast free cash flow, the first assumptions that had to be made were in regards to sales growth for RMAG;s products. As information regarding diagnostics and agriculture related products is limited and comparable companies are scarce, it was assumed that RMAG’s forecasts were slightly optimistic as to push firm value up therefore an average sales revenue was determined from RMAG and Big Sur’s forecasts. To forecast beyond 2005, sales growth per year was analysed historically and then used to extrapolate future sales until 2010. As the products will originally experience extremely high sales growth due to the unique nature of products, the growth will need to eventually slow to an industry average therefore this is demonstrated in the forecast proforma. Sales growth is expected to slow to 2.5-5%, the range of industry average to economy growth.
It has to be analyzed the company's performance, forecast fund needs and make a recommendation. The case introduces the pattern of current assets and cash flows in a seasonal company and provide and elementary exercise in the construction of the pro forma financial statements and estimation of fund needs.
Rowe, G. & Wright, G. (1999). The Delphi technique as a forecasting tool: issues and
He uses trend exploration to determine his forecast. Since he is the sales person of his business he does his own forecasting. Trend exploration involves extending a pattern observed in past data into the future. He simply looks at the past sales of a few months or a year to try to come up with a projection for the next few months or year. This is a simple way of forecasting because trend exploration assumes that sales will remain the same, however, this may not always be the case.
According to the data above, forecasted sales (in thousands) equals 223.667 + the correlating coefficient depending upon the month of the forecast. Furthermore, this indicates that before the business was opened, they were earning $223.667(thousand). Obviously, did not happen so we can disregard this value due to extrapolation.
Yankee Fork and Hoe Company have an informal method of forecasting. First, marketing determines the forecast for the next upcoming month by meeting with managers from the sales regions. In these meeting they go over the previous demand, economic changes, and shortages they experienced. Through these meetings the marketing manager develops a forecast for the upcoming year, and then passes it onto production.
In order to understand the factors of forecasting, one should imagine himself as a part of a supply chain, e.g. a factory. A factory's job is to be able to supply the market demand with lowest operating costs possible. Forecasting in a factory plays the hardest role of knowing what to produce now in order to supply the demand in the future and containing the resources available on hand to do this. The challenge is not only to come up with the future demand and the efficient manufacturing design but also to beat the lead times in between the chains in the systems. The errors can be costly in this process. Overshooting in the forecasts will result in inventory costs in the factory, where underestimating will cause late orders, extra labor costs, missed sales opportunities, stockout costs, and even production close dow...
Buxey,G.(1993). Production planning and scheduling for seasonal demand. International Journal of Operations and Production Management, 13(7),4-21.
With forecasting software, many complex statistical forecasting techniques can now be used to forecast construction cost escalation. Univariate time series method, cannot predict turning points. It follows the existing pattern of the data. Multivariate forecast methods are dependent on the accuracy of the explanatory variables used in the forecasts. One of the main difficulties in using the multivariate forecast method is the identification of statistically significant explanatory variables. The accuracy of the multivariate forecasts depend on the accuracy of the explanatory variables used to make the forecasts. The analytical forecasting techniques are only valid for short-term forecasting in stable condition, generally less than one year. No analytical forecasting technique is capable of long-term forecasting of cost escalation. Hastak et al (1996) have carried out a study on cost management planning support system for project cost control strategy and planning (COMPASS). It was presented as a new paradigm and a management tool for formulating effective strategies for project cost control. The study found that through the life cycle of a project COMPASS methodology assists management in evaluating the potential degree of cost escalation. The study identified attributes such as management errors, regulatory
Bull whip effect is the main reason for higher costs and problems in supply chains. The challenge is to utilize BTS model, solve the fluctuation problems and have zero margin of error.