From the scenario for Katrina’s Candies, assuming the absence of quantitative da
ID: 450568 • Letter: F
Question
From the scenario for Katrina’s Candies, assuming the absence of quantitative data, determine the qualitative forecasting techniques that could be used within this scenario. Now, assume you have acquired some time series data that would enable you to make forecasts. Ascertain the quantitative technique that will provide you with the most accurate forecast. When deciding whether or not to outsource offshore, list the key factors aside from maximizing profits that managers should consider. Determine the key factors that you believe to be the most influential.
Explanation / Answer
Qualitative forecasting techniques are subjective, based on the opinion and judgment of consumers, experts; they are appropriate when past data are not available. They are usually applied to intermediate- or long-range decisions. Examples of qualitative forecasting methods are: 1. Informed Opinion and Judgment, 2. Delphi method, 3. Market Research etc.
Quantitative forecasting models are used to forecast future data as a function of past data. They are appropriate to use when past numerical data is available and when it is reasonable to assume that some of the patterns in the data are expected to continue into the future. These methods are usually applied to short- or intermediate-range decisions. Examples of quantitative forecasting methods are: 1. Last period demand, 2. Simple and Weighted N-Period Moving Averages, Simple Exponential Smoothing etc.
Assuming the absence of quantitative data, the qualitative forecasting techniques that could be used in this case would be the Delphi Technique. In the Delphi Technique, a group of experts would respond to a series of questionnaires sent by Katrina’s Candies or their representatives conducting the survey. The experts would be kept apart and unaware of each other. The results of the first questionnaire are compiled, and a second questionnaire based on the results of the first will be presented to the experts, who are asked to reevaluate their responses to the first questionnaire. This questioning, compilation and requestioning would continue until the researchers have a narrow range of opinions and thus leading to a forecast.
Now, assuming tha we have acquired some time series data that would enable us to make forecasts we should use the Time-series forecasting. Time-series forecasting is a quantitative forecasting technique. It measures data gathered over time to identify trends. The data may be taken over any interval: hourly; daily; weekly; monthly; yearly; or longer. Trend, cyclical, seasonal and irregular components make up the time series. The trend component refers to the data's gradual shifting over time. It is often shown as an upward- or downward-sloping line to represent increasing or decreasing trends, respectively. Cyclical components lie above or below the trend line and repeat for a year or longer. The business cycle illustrates a cyclical component. Seasonal components are similar to cyclicals in their repetitive nature, but they occur in one-year periods. The annual increase in gas prices during the summer driving season and the corresponding decrease during the winter months is an example of a seasonal event. Irregular components happen randomly and cannot be predicted. Hence, the quantitative technique that will provide us with the most accurate forecast will be Time-series forecasting.
When deciding whether or not to outsource offshore, the key factors aside from maximizing profits that managers should consider are as follows:
1. Pricing
Price will always remain the primary motivation for outsourcing and it is important to get the best price you possibly can. While most of the discussions regarding offshoring will return again and again to this topic, it should not be the only factor influencing your final decision to go overseas with all or part of your business. Pricing is important, but let the market decide what is appropriate. This means you may opt for reverse auctioning but if you do, only serious players should be allowed to participate.
2.The Management Team
It is extremely important to know as much as possible about who is leading the team. Do they have the kind of experience or exposure needed to fulfill your objectives? Experienced leaders often ease the transition and posses the audacity needed to employ creative solutions.
3. Service Level Agreement
The service level agreement is the most indispensable document of any transition. Have everything written out so that it is crystal clear to everyone involved and leaves absolutely no room for confusion. There shouldn’t be any ambiguity about the minimum quality levels required for the services being provided.
4.Flexibility
Determine if your prospective vendor is rigid or flexible in their approach. Usually outsourcing contracts are in place for a number of years. Over time a situation may arise that necessitates renegotiation of the contract. The vendor must be flexible enough to understand its clients concerns and act accordingly.
5. Communication
Any vendor must be able to clearly understand what is required, should be able to promptly reply to your queries, and must be competent enough to ask for information in clear terms so as to avoid any delay in the decision making process.
6. Staff Resources
Your vendor must have sufficiently qualified and experienced staff who are competent enough to carry out your day-to-day operations smoothly and efficiently.
7. Reliability
When visiting a potential vendor’s site, it is imperative that infrastructure safeguards, backups against downtime and adequate staff availability are thoroughly checked. You shouldn’t place all of your trust in the technical specifications that you are presented with on paper, but must insure that everything is also present on the floor, including servers, dialers, etc.
8. Stability
It is essential that you check the references of your vendor be conducted before awarding any contracts. A past record check helps establish the trust necessary for a working relationship and should be the final assurance that you have made the right decision to go ahead and sign the contract.
The factors most influential, would keep changing keeping in view the situations and complexities of each business situation and the different evvironmental variables preavaling at that specific point of time.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.