Sales and Operations Planning
Discussion
This week we learned that sales and operations planning are intricately linked. Sales wants to ensure enough products are available for the final consumer. Operations only wants to make what is needed in the most efficient way possible. The issue is that many times sales forecasts, thus production quantities, are overestimated.
Geoffrey James of INC Magazine wrote an article on why sales forecast are inaccurate: Why Sales Forecasts Are a Joke
For the discussion, pick any public company and examine what they forecasted last year’s sales to be. Then check the company’s actual numbers for that year. Did they make their projections? Why do you think they are over/under?
Here is the link for addition information: https://www.inc.com/geoffrey-
Write around 300 words.
Answer preview
Sales forecasts are useful in the definition of company future earnings and growth rate. However, in most instances, the sales growth is either lower or higher than expected. This occurs despite the million dollars paid investors to acquire analysts’ forecasts. In the third quarter of 2019, Coca-Cola revenue in the US exceeded the expectations. The revenue expected for the quarter was $9.4 billion, but the revenue earned was $9.5 billion (Lucas, 2019, October 18). The accuracy of the sales forecast is a significant determinant of the correlation between the planned…
(350 words)