MGT515 – Business Forecasting – Highline Financial Services Inc Case Study
Forecasting in many organizations is critical as it helps the business predict various outcomes that will happen in future and that can make it decide beforehand on different options. Companies usually aim at determining the progress of their products in the market to see if they can venture into other markets or concentrate on their present market (Stevenson & Sum, 2009). Forecasting thus helps a business look at the products from a futuristic point of view especially using historical data to enhance accuracy. Forecasting greatly depends on the company and its respective product or products. Businesses may want to know how their products will do in future and thus, plan accordingly. Forecasting, as a result, provides the business with the knowledge on the possible future marketing trends while using the various patterns that are associated with the products’ sales mainly focusing on the regularity or irregularity of their respective sales.
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Products, therefore, can exhibit different trends in the market, which are important in forecasting the respective future sales using data from weekly, monthly, quarterly or annual sales. It is thus important to determine the most effective method to use when coming up with a forecast regarding a particular product. As such, the business can learn from the various projections and put in place a plan that will help it deal with any forecasted sales that may not prove satisfactorily. Therefore, an important tool can help organization plan ahead before time and focus more on improving the product and the various operations associated with it (Pilinkienė, 2015).
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The trend of the data represents cyclical variations since the data is not either on an upward or downward trend. The quarterly sales do not exhibit a linear trend or an increase or decrease in sales in a proportionate manner. The demand therefore mostly increases in the third quarter while the reduced values are in the first quarter of A, fourth quarter for B while C has relatively higher sales than the low values of A and B. Therefore, the variations do not show any pattern. Therefore, from looking at the data, one can see various trends, especially where the sales of some services have declined over time while others have been maintained at a constant over time. Such information is invaluable in making the forecast for the performance of the product.
From the data forecasted, B has the lowest sales. The service experiences a low demand in the successive year and correspondingly reduces largely when compared with the other two services. Service A does well after using the naïve method. Such a forecast should help Freddie consider on how he can boost the service and thus increase the sales associated with the service (Ord & Fildes, 2012). The data thus provides a picture of the performance of the various products especially about their performance in future. Freddie can have more information on the performance of the various products that is crucial to proper planning to improve on the services that are not doing well. Service C has a great reduction in the second quarter which provides should be a cause for alarm on the part of the business. The company should look into the ways it can enhance the provision of the service and market it to ensure that more people like the service.
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The business does not plan to use addition advertisement, and therefore, it should find alternatives that will help it stay afloat like boosting its service by increasing the professionalism in service delivery. Service A is better off as fewer changes occurs in its sales on a quarterly basis. The company can focus on increasing demand by further checking its work strategy and what made more customers to be attracted to the service in the second year. The company should find out if there are any areas of improvement in its service provision and ensure that the necessary and appropriate changes are made. As such forecasting may help a business discover weaknesses and, therefore, plan to deal with them as soon as possible (Polasek, 2013).
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Therefore, since the business has a sneak preview in the future through forecasting, Freddie should focus on the service provision and make sure he makes the necessary changes that will help in improve on the performance of the respective services. Therefore, the business can further learn from the performance in the past and focus on increasing the provision of the different services in future (Thomé et al., 2012). Forecasting is, therefore, an important tool that should be used with care to ensure that the business makes predictions that are achievable to the business and thus give the business a possible decision-making strategy that is effective and appropriate for the business.
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