Quiz 11: Managing the Forecasting Process

Business

Answer will vary. One of the possible answers is given below: a. Forecasts are not always right, but they might improve the chances of being close to right about the given process. More significantly, if the forecasts are not accepted to plan the process for the future, then there is a chance of developing own measures by different groups to guide planning, which may end up with probable confusion. b. Good forecasting techniques may be expensive. However, without good forecasts, there is a chance of ineffective process; low returns on investments, lack of customer service are some of the impacts. For example, knowledge cannot be obtained if a person thinks that education is expensive. Moreover, containing a good set of forecasts is similar to walking looking ahead rather than looking at shoes. c. The principal importance in forecasting is looking for a patterns business environment at over time. There are several types of forecasting techniques. The quantitative technique is one of them. Not only the quantitative skill is required, and also required a business understanding, the forecasting environment, and a good communication skills, so that the management is satisfied with the forecasts.

Explanation: From the given case, it is clear that Guy instructs his managers to describe the operating environment of the company over the next 20 years for the given three situations. In other words, the managers were made to think the position of the company in a long range than to think in a short range. This may lead to a discussion rather than to shorten their plans, which may occur due to the daily pressure of business. Here, the managers would develop descriptions (written scenarios) about the three situations for the future. Then, Guy would have a group discussion to discuss about the managers' opinions. Moreover, different opinions might come out which may lead to the second round of discussion. In other words, the managers might be asked to write scenarios based on the discussion.

Answer will vary. One of the possible answers given below: From the given case, it is clear that Guy's retreat is to help his managers to look ahead of company's problems and opportunities which would give a long-range view. After the first round of discussion on the written sceneries, there is a possibility that the managers are still struck up with the day-to-day business and are not fully involved in long-range thinking. Therefore, the results of the first round of discussion can summarized and provided to managers for further consideration. After the second round, members are given the opportunity to change prior opinions based on provided feedback. The empirical studies support that accuracy tends to increase and the decision tend to be more accurate than unstructured planning. By doing this process, long-range thinking can be promoted.