Communicating Forecast results with the Management

Benefits of forecasting that can be communicated with the management are numerous:

Areas:

– Budgeting, planning, production, inventory control, marketing, advertising, sales projections, investment, etc.

Benefits:

– Improve profits

– Eliminate Waste: Inventory shortages, missed due dates, lost sales, lost customers, expensive expediting, missed strategic opportunities.

Forecasts to Management: Pay attention to:
– Why is the forecast needed.

-Who will use the forecast.

-Participation of management is needed in the initial stage.

– Related problems and concerns.

– Good forecast incorporates feedback from management.

– Forecasters and managers should pay attention to: Poor data system.
– Risk of Lack of commitment on the middle management.
– Forecast should be available on a timely fashion, but often is NOT. Should define what an adequate one is.
– If inaccurate model is used, the analyst should inform the management asap, rather than just hiding it.

– The forecasting unit should be an integrated part of the organization structure.

– Analyst should pay attention to political and human relations skills when communicating the forecasts. Because forecasting has implications on the strategy.

– Protect the integrity and objectivity of the forecast.

– Recommendations from Bails and Pepper 1993:

– Become familiar with who use the forecast

– Learn about the user’s concerns.

– Defend your forecast against political concerns.

for further interesting readings:

Market Demand Forecasting Models and their Elements in the Context of Competitive Market

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