One of the biggest problems with predicting order problems is just that - the predicting. As its only a prediction, it is not garenteed to be right, and as such any specific change in the shopping habits of regular customers (e.g. decide to buy next years christmas presents in January so as to take advantage of any discounts availible) will have a significant effect on the model it vast numbers of customers do it. For one, if they were using the prediction, they would be lacking in January and need more emergency orders whilst being overstocked in Decemeber.
Due to these possible changes, the company will be losing out of profit by ordering emergency orders, along with being out of stock. This is the problem with the "order to supply" attitude, as changes in the consumers buying habits on vast scales can have incredibly damaging effects in theory.
Monday, 2 February 2009
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