Business Supply chain tasks(due in 10 hours)

3 short assignments. Post all 3 in separate files

*Discussion Post 1 paragraph

*Assignment 2 paragraph

*classmates Discussion responses 

5063 Due 4 Feb

Assignment 4

In 2-3 paragraphs, state what you have learned about inventory management and forecasting from the materials and discussions.

DQ 4

What can cause uncertainty in demand and forecasting?

(Kristopher) There are many variables that cause uncertainty in product demand and forecasting. These include lead time for deliveries, rate of consumption, requirements of funds, keeping qualities, storage costs, availability of space, price fluctuations, insurance costs, obsolesce price, seasonal considerations, and government or statuary restrictions (Kumar, 2012). But even those do not encompass all the variables associated with demand and forecasting. Lead time can alone fluctuate greatly depending on various social, economic, geographical, and quantity desired variations. Therefore, material control is more pertinent when dealing with products that contain additional variables to the uncertainty. Additionally, the forecasting requires coordination and cooperation with all parties involved throughout the supply chain process to ensure that it experiences tight control, with limited unnecessary variables. This product now demands more time and energy to control, but may deem beneficial to operations if that is where the majority of revenue comes from. This is where the balance and art of demand forecasting, inventory balance, and foundational business relationships are necessary.

Technology and how quickly it is affecting the products that consumers are desiring contribute to the uncertainty with demand levels. Retailers can purchase large quantities of electronic devices with the greatest software available at that time, but may end up reducing prices and revenue by not knowing when the next advancement in technology turns that device less desirable or obsolete. This is especially reflecting in the cell phone industry, where many manufacturers are consistently developing the faster, better, brighter phone that is guaranteed to entice those with the less advanced phone. But having the balance of knowing the quantity to purchase for predicted sales becomes more viable and essential.

 Many products that generally do not change or are not often at a high demand generally consume large areas for storage, but are essential to everyday life. For example, building materials like plywood is not an item the average person is purchasing on a daily or weekly purpose. But there are contractors that have businesses the must have this consumable item during building construction. However, this item may become over demanded if a hurricane was heading your way. Plywood to board up windows for protection would now be more valuable than the newest cell phone that just arrived. Understanding weather trends can assist in demand forecasting, but sometimes these trends can surprise many who ignore them.

Uncertainty in consumer demand is inevitable, since the world is geographically diverse, filled with diverse individuals that have both nature and nurture tendencies. This is an unsolvable problem that requires vast amounts of data and metrics to even proportionally become close of getting correct. But even the best can make forecasting mistakes due to unknow and external influences on the supply chain process.

References:

 Axsater, Sven. (2015). Inventory Control. (3rd ed.). New York: Springer.

 Kumar, Abhishek. (December 21, 2012) Demand Forecast Process and Inventory

           Management. Retrieved from

https://www.slideshare.net/AbhishekKumar159/  (Links to an external site.)Links to an external site.

(Francisco) Uncertainty can arise from several means, from changes in political environments, demographic, or even an economic recession. Also, “On the demand or customer side, there is usually uncertainty in how much customers will buy and when they will buy it…On the supply side, there might be uncertainty about obtaining what is needed from suppliers and how long it will take for the fulfillment of the order” (Coyle et al., 2013 p.295). Uncertainty can also arise from transportation providers in terms of receiving reliable delivery. These errors can occur in several ways, from improper data collection to market shifts or use the wrong model to forecast demand. Markets or changes in demographics can cause changes in consumer purchasing behavior which may result in either under or over forecasting. When forecasting, several models are used depending on the stock. The key to successful forecasting is to choose the technique that provides the least amount of forecast error, the simple moving average, weighted moving average, or exponential smoothing (Coyle et al., 2013).

References:

Axsater, S. (2015). Inventory Control (3rd ed.). Switzerland: Springer International Publishing.

Coyle, J., Langley, C., Novack, R. and Gibson, B. (2013). Supply Chain Management. Boston, Massachusetts: Cengage Learning