Author Question: A process that organizations can use to arrive at a consensus forecast is called Sales and ... (Read 140 times)

Charlie · **on:** Jun 28, 2018

A process that organizations can use to arrive at a consensus forecast is called Sales and
Operations Planning. Discuss the five steps used to implement this process.

Question 2

Many companies use powerful computers to dig through volumes of data to discover patterns about their customers and products. This activity is called data ____.
a. mining
b. snooping
c. surveying
d. discovery

meryzewe · **Reply #1 on:** Jun 28, 2018

Answer to Question 1

The S&OP Benchmarking Consortium in the Center for Supply Chain Research adopted a five-step process in arriving at this consensus forecast. Step 1 (Run sales forecast reports) requires the development of a statistical forecast of future sales. This would be done using one or more forecasting techniques. Step 2 (Demand planning phase) requires the sales and/or marketing departments to review the forecast and make adjustments based on promotions of existing products, the introductions of new products, or the elimination of products. This revised forecast is usually stated in terms of both units and dollars since operations are concerned with units and finance is concerned with dollars. Step 3 (Supply planning phase) requires operations (manufacturing, warehousing, and transportation) to analyze the sales forecast to determine if existing capacity is adequate to handle the forecasted volumes. This requires analyzing not only the total volumes but also the timing of those volumes. Step 4 (Pre-S&OP meeting) asks individuals from sales, marketing, operations, and finance to attend a meeting that reviews the initial forecast and any capacity issues that might have emerged during Step 3 . Initial attempts will be made during this meeting to solve capacity issues by attempting to balance supply and demand. Alternative scenarios are usually developed to present at the executive S&OP meeting (Step 5) for consideration. These alternatives would identify potential lost sales and increased costs associated with balancing supply and demand. The sales forecast is also converted to dollars to see if the demand/supply plan meets the financial plan of the organization. Step 5 (Executive S&OP meeting) is where final decisions are made regarding sales forecasts and capacity issues. This is where the top executives from the various functional areas agree to the forecast and convert it into the operating plan for the organization.

Answer to Question 2

A