Forecasting Assignment Paper

Forecasting Assignment Paper

Background Information

       Meijer foods Inc is in a head to head battle with Wal-Mart.   The two store chain infrastructures are similar.   Because of Wal-Mart’s size, it has an economy of scale that allows it to operate approximately 5 percent cheaper.  Meijer believes that the 5 percent comes from a more efficient supply chain.  A 20+ million dollar, 18 month integrated software development effort was undertaken.  A peripheral outgrowth of this effort was the development of a data-mining base necessary to forecast adequately.

       Meijer designed an automated system that maintain inventory starting from the point of sales (the register).  The system then automatically provides proposed purchase orders for replacement product for each store.  The purchase order automatically determines delivery time slot at the warehouse and the appropriate store.   The software automatically cross-dock a large amount of incoming product directly to trailers destine to appropriate stores.  A just-in-time focus of this effort reduces product storage at the individual store to zero.    The system maintains accountability of all products at all times.  No mater what step in the process that product may be.

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Forecasting Overview

       Meijer Foods appears to use models from each of the four types of forecasting techniques.  Some are stand-alone, others range between partial to totally automated.  

        When a customer purchases a product (at a cash register), a series of events occurs within the computer environment within minutes.   The outcome is a proposed purchase order.  For most product, one purchase, relates to one item ordered.  Products with quick turn-around cause the shelf to empty faster.  Therefore, the faster product is purchase off the shelf, the faster a purchase order will be issued by the system. ...

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