Answer to Question #207316 in Management for Rachel

Question

Kumaran Pillay has a vegetable stall at the Suva Market. His business has been plagued with under-stocking and over-stocking problems for some time now. When he under-stocks, he loses sales as customers move to competing stalls. When he over-stocks, is left with unsold vegetables. These are perishable and cannot be kept long for later sales. Pillay is concerned with how he can minimize these losses stemming from under and over-stocking.

1.     Identify and explain how he could use 3 qualitative forecasting methods to improve his stocking. Note that you will need to justify your proposals and link it to the business being discussed. (10 marks)

 

2.     Identify and explain how he could use 2 quantitative forecasting methods to improve his stocking. Note that you will need to justify your proposals and link it to the business being discussed. (10 marks)

Answer 1

Question One

Sales Force Polling

Kumaran can use the people close to his customers to provide him with useful insights on the consumption trends of his customers to enable him to know when the demand is high so that he can buy more stock.

Delphi Method

This involves questioning experts in this field for opinions. The forecasts done by the experts are compiled and analyzed by an external observer and then given to Kumaran (Dwyer et al, 2012).

Opinions by Executives

Under this method Kumaran seeks expert’s opinion on his business practices such as future sales, purchasing and finances. This is in view to the experts helping him to predict his future sales forecasts. However this method will achieve the best results if used together with other quantitative methods of forecasting.

Question Two

Average Approach

In this approach Kumaran will conduct an average sales of the under stocking and overstocking to be his future sales over a specified period of time.

Straight Line Method

In this approach Kumaran collects past data and does some analysis on the collected data to determine future trends of customers. After that the straight line method is used to measure the growth or future predictions in form of percentages.

References

Dwyer, L., Gill, A. and Seetaram, N. eds., 2012. Handbook of research methods in tourism: Quantitative and qualitative approaches. Edward Elgar Publishing.