Discussion 3.1 Forecasting
Questions
1. What is DF and why is it important?
Demand forecasting or DF is very important because based on the case study it involves production planning
this is how many units to be manufactured and the resources required can be estimated by demand
forecasting and thus production planning can be done then sales forecast that sales is being forecast based
on demand forecasting, inventory control that estimates of inventory required and the arranging the required
inventory is being done and lastly the control of business using demand forecasting it will be easy like on the
budget needed is being prepared and work is being executed based on demand forecasting. Estimating the
future sales of the commodity or sales volume for a particular period is also important to consider in forcasting.
2. Why might a company executive make bold predictions about future demand to Wall Street
analysts?
Wall Street analyst’s role is to determine good investment opportunities and assess the various financial
instruments like bonds, shares, IPOs. Based on their recommendations, investors take the decisions of
investing in the financial instruments of the company. Thus, the company executive makes bold predictions
about future demand to attract investors based on analysts’ recommendations.
3. How might an executive’s comments to Wall Street analysts affect demand forecasts, and what are
the consequences of doing so?
Investment in the share market depends completely on the demand forecast of the shares of the company.
Based on the executive's comments the forecast is being made by the analysts and the investor's inclination
is being decided. Thus, the executive's comments affect the demand forecasts. As a result, the prediction is
being made and the investors start investing in the company's shares and other financial instruments.
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