Forecasting Effects on Supply Chain
Analysis of Forecasting on Supply Chain
Background:
A supply chain is a network that performs functions from supplier’s supplier to customer’s customer. It encompasses all the process involved in delivering the final product to the final consumer. Supply chain is filled with various uncertainties such as demand, process, and supply. Inventories are often used to protect the chain from these uncertainties. The higher the variations the more the losses and every company needs to minimize the variations and uncertainties in its supply chain.
There are various causes of uncertainties. Among them few that can be listed are demand variations based on the type of product, the suppliers’ receipt variations which depend on the supplier’s ability to provide the raw material. One of the important variations that I have come across during my work experience is the forecasting variation. A small change in forecasting of demand changes the planning stages of the product and subsequent orders across the supply chain.
We already know about the supply chain uncertainties. Forecasting is an area which plays major role in deciding if the company has met the targets or is losing customer or incurring cost. There have been research in the area of bullwhip effect and demand uncertainties but I would like concentrate on the forecasting effect on the supply chain. How the variations in forecasting play along the supply chain, the effects on a company, its planning process and its own forecasting and demand variations.
Forecasting is a major point which decides companies’ abilities to avoid: 1) Unsatisfied customers 2) Lost business 3) Increased cost and lower benefits 4) Inefficient utilization of company resources.
Hence is it important to know the effect the wrong forecasting has on the supply chain. This has encouraged my research on this topic.
Research Question:
The research project will find out the forecasting effects on a supply chain. The
Background:
A supply chain is a network that performs functions from supplier’s supplier to customer’s customer. It encompasses all the process involved in delivering the final product to the final consumer. Supply chain is filled with various uncertainties such as demand, process, and supply. Inventories are often used to protect the chain from these uncertainties. The higher the variations the more the losses and every company needs to minimize the variations and uncertainties in its supply chain.
There are various causes of uncertainties. Among them few that can be listed are demand variations based on the type of product, the suppliers’ receipt variations which depend on the supplier’s ability to provide the raw material. One of the important variations that I have come across during my work experience is the forecasting variation. A small change in forecasting of demand changes the planning stages of the product and subsequent orders across the supply chain.
We already know about the supply chain uncertainties. Forecasting is an area which plays major role in deciding if the company has met the targets or is losing customer or incurring cost. There have been research in the area of bullwhip effect and demand uncertainties but I would like concentrate on the forecasting effect on the supply chain. How the variations in forecasting play along the supply chain, the effects on a company, its planning process and its own forecasting and demand variations.
Forecasting is a major point which decides companies’ abilities to avoid: 1) Unsatisfied customers 2) Lost business 3) Increased cost and lower benefits 4) Inefficient utilization of company resources.
Hence is it important to know the effect the wrong forecasting has on the supply chain. This has encouraged my research on this topic.
Research Question:
The research project will find out the forecasting effects on a supply chain. The
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