Merriwell Bag Company - Case Study Example

Merriwell Bag Company Develop and justify a forecasting method that fulfills the company’s specifications. Forecasting is often referred as a process of making statement which is further used for measuring the future circumstances of business. In case of Merriwell Bag Company, demand forecasting can be suggested as the appropriate method in satisfying the company’s requirements. Demand forecasting method can be defined as the process of estimating the future change in demand for products and/or services which a consumer will afford to buy.

Generally, demand forecasting involves quantitative method in order to quantifiably determine the growth and likewise develop strategies. Furthermore, demand forecasting helps in constructing the pricing decisions as well as estimating the investment requirements for the future use (Lapide, 2006). 2. Forecast aggregate demand by month for the year 2008.From the demand forcast, it can be noted that the demand for the bags are maximum in the market in the pick season. It shows that Merriwell Bag Company’s bag demands depend largely upon its seasonality.

However, it can also be observed that the demand for the bag declines steeply in the market during the off-season. Even though, from an overall perspective a growing trend can be witnessed in the demand forecasted.3. In addition to forecasting demand of larger customers and aggregate demand, how might the accuracy of the forecast be improved?To certain extent the accuracy of forecasting can be improved through selecting separate forecasting groups with proper management control system. The primary objective of forecasting group is to make plans in order to collect appropriate information related to demand.

The members of the forecasting group should be well trained in this regards. Members of the group should use both the qualitative and quantitative method in forecasting to gain more accurate information along with development of new measures for improving forecasting in future. After every session the group member should measure the processed method and re-analyze the data collected to minimize errors (Moon, Mentzer, Smith, & Garver, 1998).4. What role should Ed Merriwell’s feel for the market play in establishing new sales forecasts?

The forecasting method used by Ed Merriwell in the prior years was based upon his ‘feel’ which has been recently observed as ineffective in terms of accuracy. According to the quantitative method used, the sales of the organization are likely to increase during the entire year of 2008, especially in the season time. However, in establishing the new sales forecast, Ed Merriwell’s ‘feel’ is quite likely to have a negative impact on the operational process owing to the changes in the personnel associated with the customer purchasing departments along with the rapid increase in the short-shipped accounts.

It is worth mentioning in this regard that quantitative method shall render more accurate information on this aspect in comparison to Ed Merriwell’s ‘feel’ (Schroeder, 2009).5. Read an article from Journal of Business Forecasting. Summarize the key points from your article in a paragraph, and discuss how information from the article can be applied to the Merriwell Bag case or help you understand the issues in the case. The authors, Mark A. Moon and John T. Mentzer, in their article titled as “Seven Keys to Better Forecasting” affirmed that there are four keys by which a company can improve their sales forecasting.

According to the authors, it is quite essential to obtain an unambiguous understanding regarding the concept and implications of forecasting. Gaining knowledge regarding the relation of forecasting with the operational strategies of the organization is also vital to attain efficiency. Cooperation amid the forecasting groups along with the implementation of a simple forecasting procedure is also necessary to obtain accuracy. The authors also suggest reanalysis of the entire process to avoid errors and misjudgments (Moon & Mentzer, 1999).

Hence, in relation to the Merriwell Bag’s case, it can be suggested that these measures can assist the organization to eradicate the lacunas persisting in the currently applied forecasting process and allow the development of accurate strategic planning towards its success. ReferencesLapide, L. (2006). Demand Management Revisited. The Journal of Business Forecasting, pp. 17-19. Moon, M. A. & Mentzer, J. T. (1999). Improving sales force forecasting. The Journal of Business Forecasting, pp. 7-12. Moon, M. A.

, Mentzer, J. T., Smith, C. D. & Garver, M. S. (1998). Seven Keys to Better Forecasting. Retrieved from http://www.uam.es/personal_pdi/economicas/rmc/prevision/pdf/seven_keys.pdfSchroeder, R. G. (2009). Operations Management (W/Cd) 3E. Tata McGraw-Hill Education.Bibliography Pearson Education. (n.d.). Customer-Driven Marketing Strategy. Retrieved from http://www.prenhall.com/behindthebook/0132390027/pdf/Kotler_CH07.pdfAppendixTrend and Seasonality Demand Forecast