Discuss how certain forecasting techniques change organizational decisions?

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Luke Messer
Option A
Topic: Organizational methods for forecasting for future demand
Type of forecast used: Forecasting is an essential skill for companies because inaccurate forecasts will most likely lead to a supply surplus or a supply shortage (Stevenson, 2022). The specific organization in this article was not named so that their forecasting strategies were not given away in their specific company context (Banker, 2019). The article did specify that the organization is in the top 50 of the largest United States companies (Banker, 2019) . The company has a very sophisticated way of forecasting sales (Banker, 2019). They use an algorithmic forecast model to get a close and accurate estimation of how well or how bad their sales will do (Banker, 2019). The undisclosed company uses point of sale data to make their best guess on how much money they will make (Banker, 2019). Point of sale data takes data from each customer transaction that happens at their stores. This company plans for the next 65 weeks of sales (Banker, 2019). On a more practical side of things, variations in demand will end up fixing itself in this store’s distribution centers where they order 2 weeks ahead of time to make up for a surplus or shortage (Banker, 2019).
How do certain forecasting techniques change organizational decisions? This undisclosed retailer uses event data with events such as back to school shopping to effectively sell products that students might need when they go back to school (Banker, 2019). This company has 46 stores that are close to colleges so those stores carry a larger number of products that students might need to get comfortable in their new dorms (Banker, 2019). This event data forecasting changes the normal organizational decision to simply not carry convenience items for college students (Banker, 2019).