Demand Forecasting Essay

5732 words - 23 pages

The Accuracy of Demand Forecasting Between Point of Sale and Order History

Supply Chain Management TBS908

Table of Contents
1. Executive Summary 4
2. Company Profile 4
3. Demand 5
3.1 Demand Forecasting 6
3.2 Demand Forecasting Methods 6
3.2.1 Opinion Polling / Qualitative Method (subjective): 6
3.2.2 Statistical Methods/Quantitative Approach (objective): 6
4. Order History Vs. Point-of-sale 8
5. Planning Promotions 8
5.1 Promotion Planning and Supply Chain Contracting in a High-Low Pricing Environment 9
5.1.1 Basic Household Inventory Model: 9
6. Types of demand forecast in GCC and UAE 10
7. Objective 10
8. Methodology 11
Table 3 13
Figure 1 13
9. ...view middle of the document...

POS demand forecasting is not a total sum solution and a collaborative approach should be considered to ensure optimal returns and competitive edge is maintained.
2. Company Profile

Since 1955, The Chalhoub Group has been the leading partner for luxury all across the Middle East. The group developed itself into becoming a major player in the beauty, fashion and gift sectors regionally by proving its expertise in retail, distribution and marketing services.
The Chalhoub group is building brands in the region with a blend of its Middle East expertise and intimate knowledge of luxury. The passionate team of Chalhoub offers service excellence to its partners and unique experiences to all the customers.
Chalhoub group holds a workforce of more than 11000 people who are located in 14 countries and a network of over 600 retail outlets. The highly skilled and dedicated team is the driving force behind the group’s success. Chalhoub is fueled by demonstrating professionalism and passion in the work that they do.

The products are organized into 3 major operational divisions and each of these are distributed through the relevant channels:

The division include:
a) Consumer Products Division also known as CPD - includes products that are pushed across the supply chain to the final consumers or the general public.
* L’Oreal Paris, Garnier, Maybelline, Softsheen-Carson, Lascad, Essie etc.
* Delivered to: Retail channels.
b) The second division is called the Professional Products Division or PPD -These products are priced slightly higher than the CPD and are distributed to salons across the country
* L’Oreal professional series, Kerastase, Redken, Matrix, Mizani etc.
* Delivered to salons world wide
c) The third group of products is the Active Cosmetics Division also known as the ACD - These are distributed to healthcare outlets including pharmacies, drugstores, and medi-spas.
* Vichy, La Roche-Posay, SkinCeuticals, Roger & Gallet, Sanoflore etc.
* The CPDs are directly delivered to Hypermarkets, Supermarkets, Departmental stores, Co-operatives, Self-service outlets, Wholesale outlets and pharmacies.

The products are distributed actively through around 50 GPS enabled vehicles which are actively managed by around 300 staff members working round the clock ensuring admin, warehousing and delivery activities are smoothly executed. All the operations in UAE are handled from a single point in the DIP Facility; which all together contribute to accomplish an efficient supply chain strategy.

3. Demand

In economics, one of the basic principles one must understand is the meaning of demand. The About Education (2015) website clarifies demand as being the want, need or desire of a particular consumer to possess any goods or service. This could include anything from sunglasses to airplanes. According to the Tutor2U (2014) demand can be classified under two segments: Elastic demand and inelastic demand....

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