Essay on The Importance Of Forecasting in Market Operations

"I saw the future, which is very similar to the present, but only a little more." Kehlog Albran told his book The Profit. This pseudo-philosophy is actually a concise explanation of the prediction, which is science to predict future events.

From an operational point of view, market opportunities are the driving force of production decisions, are created in the form of demand forecasts and provide inputs (process design, capacity planning, master planning, scheduling, inventory management) for production planning . But why is prediction so important for operation?

Unfortunately, we need to be aware that the only certainty regarding forecasting is actually wrong. As a result, costs are always incurred. That's why the problem of operational management is the degree of error in the forecasting process, with emphasis on biased reduction and bias in prediction.

What is today's world? The prediction work becomes more difficult as the variety and quantity increase. As Marshall L. Fisher explains in his article on meeting the uncertain world needs, it is a good idea to use older popular systems like early correspondence programs, timely inventory management systems, I can not keep up with my job. To reduce manufacturing costs, the company began looking for better strategies. Accurate response systems are one of the new ways of these forecasting processes to determine whether predictors are unpredictable, to make the supply chain quick and flexible, to postpone forecasts that administrators can not predict I will do it. Decide on the project until several market signals are issued 1. An accurate response system takes into account two new factors in the prediction.

The shipping market is predicted to focus on the future of the entire market. In this forecast, the external environment operated by the shipping company will be considered. The main goal is to investigate the global food market and prepare for the next 3 months. Statistical analysis of the overall supply and demand factors and analysis of the impact of these factors on the cargo market will be conducted (Stopford, 1997). It is important to understand the business cycle of the shipping industry before conducting the analysis. According to Stopford, 1997, page 42, this is a "market process that adjusts supply and demand changes through a familiar cycle of prosperity and depression." Understanding the business cycle is very important in predicting the shipping market. As shown, the cycle has 4 steps (Stopford, 1997). Traders should understand the various stages of the transport cycle and make decisions based on it.

Predictive operation managers need long-term forecast (more than 5 years) and short-term sales forecast (12 months) to make long-term market forecasts. It is not normally operated. Forecast by marketers and support by economic, political, social and technical data. Forecasts can take the form of statements in the form of expected output and currency. Based on this forecast, organizations need to consider capital investment, such as building new buildings to support increased quantities and replacing equipment with outdated technology.

Despite being called "sales forecast", the goal is still to predict future market demand. This will be more difficult to predict new products, new services, and the market potential of these new products. Don Rice pointed out that there are various forecasting methods to judge the market potential, but as with all predictions the results are inherently wrong. Predicting market demand or market potential using clear, accurate and relevant data (both human and system generation) can make the forecasting process a good start.