Demand Forecasting
PART II.
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Strategic Forecasting, a demand management process, is a complex and required business activity that integrates historical demand information, company demand management objectives, and field sales intelligence information into a management forecast that represents the best estimate for future product demand. There are three components to Strategic Forecasting:
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Historical demand information is used by statistical forecasting to extend the past into the future. It is the beginning process of developing a management based forecast that includes the three components of Strategic Forecasting. A good statistical forecast provides valuable information to the other two components. Time and effort should be given to develop the best statistical forecast. It should be thought of as the beginning of the process, not the end of the process. Company demand management objectives are specific objectives about product and market demand levels. They represent company and people actions that result in prescribed levels of incremental product sales. In other words, what actions can you take to cause the demand for your products to go up? Can you estimate the impact of your actions and plans in terms of incremental product demands? If the answer to these questions is yes, you should integrate this important information into your product forecasts. This activity is called defining and managing forward looking demand components. More specifically, it is establishing and quantifying sales tactic modifiers. The basis for this activity is usually developed in your company sales plan. If your company sales plan does not clearly describe how this activity is to be accomplished, you may want to reevaluate its purpose, function, and structure. The author has written an article entitled "How to Develop and Implement an Effective Sales Plan in Your Company" that describes how to accomplish this important activity. To be Continued STAY CONNECTED To stay current on bullet-proofed manufacturing solutions, subscribe to our free ezine, "The Business Basics and Best Practices Bulletin." Simply fill in the below form and click on the subscribe button. We'll also send you our free Special Report, "Five Change Initiatives for Personal and Company Success." Your
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