Team Member Guide

  Analyst Report Forecasting

Worst Case / Best Case

You can use your Capstone.xls spreadsheet to examine worst and best case scenarios. The technique is discussed in the Forecasting section of Guide. To summarize, put your worst case into the Marketing spreadsheet. To produce a 120 day inventory above your worst case, multiply by (365+120)/365 or 1.33 or 4/3rds. Put the result into the Production spreadsheet (less any inventory on hand). For example, if your worst case is 1000 units, and you want a 120 day spread, produce enough to give you an inventory of 1000*4/3 or 1333. (For a 90-day spread, produce 5/4ths or 1.25 your worst case.)

Each product contributes points. If your company has 3 products, each product can contribute 33 points. If it has 8, each product can contribute 12.5 points.

The more products one has, the less likely it becomes that a company will earn 100 forecasting points. If you have 8 products, you need 8 good forecasts. On the other hand, if your company has fewer products, a missed forecast costs more points. If you have three products, a miss costs 33 points.