Partial forecasts

0 / 5. 0

Partial forecasts

Category: Case Study

Subcategory: Logistics

Level: Masters

Pages: 1

Words: 275

Partial forecasts are very disadvantageous for any business that relies heavily on the supply of products. The main effect of partial forecasts is the fact that there are increased chances of shortages in terms of supplies. Such partial forecasts end up affecting the distribution channels of products. The main concern that faces the business is the source of emergency supplies. The partial forecasts are not an actual representation of the happenings that occur at the store level. The stores need to have stock that can be used to run the store for given periods even before fresh supplies. Partial forecasting does not take consideration of these factors at the level of the store. Partial forecasting, therefore, leads to various challenges when the partial entries are introduced into the system. First and foremost the business will run out of stock and hence create the need for replenishment. This causes a flurry of activities as the business seeks to regain its storage capacity.

The ignore it approach could seem like a noble idea but it has been found to provide a false sense of stock security yet it does not take into consideration the trends in other stores. This approach only works in-store replenishment and not for managing stock in the stores as it creates an incomplete model for the supply of products. The approach is one-sided as it does not encourage preparedness in terms of availability of stock for sale at specific times.

The ‘bottoms up,’ ‘top-down’ approach is a historical method used to evaluate market behavior. This approach is faulty as it is highly assumptive on factors that affect the marketability of products in the market. Additionally, this approach fails to tackle the issue of bunching that is a problem to the business and as such it is not useful to the business. The failure to address the bunching problem is a challenge to the business and thus the ‘bottoms up, top-down ‘ approach is flawed.