Forecast System of the Yankee Fork and Hoe Company - Admission/Application Essay Example

As noted by Ron Adams that for data collection he meets several managers to collect data regarding upcoming promotions, surplus and shortages, and economic conditions to develop a monthly forecast for the next year. Similarly, in the product department, Phil Stanton is using his own opinions for creating forecasts after receiving an annual report from the marketing department. In this regard, the forecast system of the Yankee has no quantitative forecasting methods and no reliable data collection sources. Moreover, there is no commu7nication between the two departments which is also affecting the accuracy of the forecast system of the company and is causing issues for them.

Proposed Forecast Method

It is important for the Yankee and How Company to have a well-balanced and reliable forecast system. It is also observed that the demand for bow rakes is greatly affected by the seasonal effect, therefore; a multiplicative seasonal method for forecast would be effective to use.

Year 1

Year 2

Year 3

Year 4

Seasonal Factor Average

Quarters

Demand History

Seasonal Factor

Demand History

Seasonal Factor

Demand History

Seasonal Factor

Demand History

Seasonal Factor

1

128,015

1.12

151656

1.24

95800

0.71

160282

1.16

1.06

2

66,302

0.58

92726

0.76

115190

0.86

72301

0.52

0.68

3

53,707

0.47

113829

1.07

138372

1.03

121193

0.88

0.86

4

209,925

1.83

129230

1.06

189292

1.41

197363

1.43

1.43

Total

457,949

487,441

538,654

551,139

Average

114487

121860

134664

137785

Now we will calculate a naïve forecast to estimate the increase in demand per year.

Year 2= 29492

Year 3= 51213

Year 4= 12485

Average= 31063

By adding the average 31063 to 114487, assuming it as a demand for prior years, the result will be equal to 145551. Assuming 145551 is a demand for the prior year we will multiply it by seasonal index to get the 5-year forecast.

Q1

145551

1.06

154284

Q2

145551

0.68

98975

Q3

145551

0.86

125174

Q4

145551

1.43

208138

Recommendation

It is recommended to the marketing department and production department of the Yankee Fork and Hoe Company to introduce independent and quantitative measures for forecasting because it is not possible to forecast accurately using a qualitative method. Moreover, they should improve communication between both the departments so that they could consider different strategies to control costs and to improve their customer services.

Conclusion

 Though, it is not possible for anyone to make 100% accurate forecasting, however, by employing an effective method companies can reduce the chances of human errors that are high in making an estimation. Yankee Fork and Hoe Company can also improve their forecasting and customer ratings by employing these quantitative measures for forecasting.