Question

Identify any six factors that should be taken into consideration when implementing demand forecasting in a department store.

Answer 1

Six factors that should be taken into consideration when implementing demand forecasting in a department store are as follows:

• Identification of current market situation: It is essential to identify the current market situation before implementing demand forecasting. The competitiveness, pricing standard, product quality standard, and marketing standard must be properly evaluated before implementing demanding forecasting in the departmental store. After the identification of the target market, it is important to evaluate additional smaller projects, adding or deleting products, development of add-ons and current market niche.
• Determination of the resourcefulness of the sales team: The resourcefulness of the sales team must be properly analyzed before the implementation of demand forecasting in departmental stores. The sales team must be efficient enough in knowing product line, industry standard, competitive level, and market relationships before implementing plans. A realistic sales forecast report and individual sales forecast report should be highly prioritized
• Development of sales support infrastructure:A sales supportive infrastructure is always beneficial in developing demand forecasting policy for departmentalstores. Product development, consumermanagement, consumer base pricing strategy and maximization of sales should be properly prioritized.
• Accurate job costs: The sales executives must be provided sufficient remuneration for their effort. Performance-based job cost must be implemented.
• Transformation of a known process to unknown:for a long term forecast of demand, the form of rising, uplifting and decline of sales must be considered effectively. Every step of sales lifecycle should be properly evaluated for demand forecasting. For example- estimation and post-sales reports both are required to be evaluated.
• Key factors in concluding times: It is the most challenging part of demand forecasting which outlines sales forecast by figuring out closed projects. It includes differentiation of projects, different stages of projects and reality of the project.