Impact of business forecasting on demand planning. A strategy for improving business forecasting and reducing inventories throughout the supply chain for fast moving consumer goods in the Middle East market.

Abstract

Poor quality of information and forecasting create a number of problems for manufacturing companies, such as poor planning of products and insufficient service levels, which leads to increased inventory and stock holding or stockouts and increased total costs. Cussons (UK) Limited is experiencing precisely these problems. Apart from these problems normally associated with forecasting demand for fast moving consumer goods there is an additional problem of reconciling the Western calendar with the Muslim calendar, and a recognition of the effects that Muslim religious holidays, as opposed to Christian religious holidays, have on demand. Muslim religious holidays rotate backwards with regard to the Western calendar, but in fact they occur at known dates and therefore the effect they have on demand for products can be taken into consideration when attempting to forecast demand. An additional problem that influences Cussons' sales in the market is the seasonal pattern of demand. Due to this, there is an increase in demand for Cussons' products during summer months. From the analysis of both data sets it was identified that the warehouse movement data is less variable and more reliable for business forecasting than order data. In this thesis, these forecasting problems are examined as a case study, focusing on these particular problems. To overcome these problems and to improve business forecasting of Cussons' products in the Middle East market, a forecasting strategy has been suggested which will enable Cusson's to reduce the inventories throughout the supply chain and to improve their customer's service.