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db_1_replies.docxStudent 1
David Presley
DB1: Option A, Forecasting
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Through a recent forecast through eMarketer, Snapchat (SNAP) is projected to bring in roughly $3 billion in advertising sales alone. Yahoo and Twitter have seen decreasing figures in advertising numbers, where Snapchat has seen growth. Facebook and Google are currently dominating the advertising market, but Snapchat looks to compete with the two giants: “Snapchat is expected to present a challenge to Facebook and Google’s rule of mobile advertising” (Simon, 2017). The few articles I researched don’t specifically speak on the type of forecasting that was used to acquire these figures, but from what I’ve gathered it appears to be “time-series forecasts”. “Time-series forecasts simply attempt to project past experience into the future. These techniques use historical data with the assumption that the future will be like the past” (Stevenson, 2015, pg. 82). Snapchat’s previous advertising figures, as well as their incredible $9 price jump in the stock market, would point to Snapchat being on the rise. Also, what points to Snapchat surpassing Yahoo and Twitter, is the decline in advertising revenue from both companies. To look at the declining numbers and assume a similar trend in the future would share the same style of forecasting as the time-series forecasting approach. Snapchat’s current market share in the advertising realm is relatively low (1.3%), but according to the same forecast by eMarketer, their market share (in terms of percentage) will double to 2.7% by 2019 (Jain, 2017). The forecast couldn’t have come at a better time for Snapchat and it’s shareholders. The stock price has shot up in the very early stages since becoming a publicly traded company, and these forecasted reports point to more growth in the next two to three years. Twitter and Yahoo currently have more advertising revenue than Snapchat, but if the time series forecast continues to be applied, it points to Twitter and Yahoo continuing to decline, and Snapchat continuing to grow. The impact of the forecast will soon be determined (as the report came out today), but this bodes well for shareholders and potential shareholders that continue to help financially support the new publicly traded company.
References:
Jain, R. (2017, March 27). Snapchat Parent Snap Inc. Revenue To Reach $3 Billion By 2019: Report. Retrieved from http://www.ibtimes.com/snapchat-parent-snap-inc-revenue-reach-3-billion-2019-report-2515505
Simon, K. (2017, March 27). Snapchat forecast to pull $3bn a year by 2019, to surpass Twitter, AOL and Yahoo. Retrieved from http://www.phonearena.com/news/Snapchat-forecast-to-pull-3bn-a-year-by-2019-to-surpass-Twitter-AOL-and-Yahoo_id92434
Stevenson, W. J. (2015). Operations management. New York, NY: McGraw-Hill Education.
Student 2
1 day ago
Misty Raup
Demand Forecasting- McDonald's
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While McDonald’s has long been considered a burger fast-food enterprise across the globe, much of how they achieve their iconic status has to do with how they forecast their sales for future periods. Looking at upcoming promotions, seasonal trends, and consumer demands, their forecasting method is primarily demand forecasting. They utilize daily point-of-sale data at each item level, as well as stock levels at the restaurant and by embracing technology and interconnected data systems to never run out of stock, they achieve customer satisfaction by honing in not only on what people want each day, but what they will want in the near future, (Supply Chain Movement, 2012).
This strategy has served them well as they saw share prices rising 27% in 2015, the second-best performance on the Dow Jones Industrial Average, (Sozzi, 2016). With the launch of all day breakfast, they knew in advance that they would need to increase their supply of hash browns and McMuffins, two items offered on their all day breakfast menu. In article in Benchmarking for Quality Management & Technology (Bradford), “the ability to forecast consumer demand accurately is of great importance”, (Adbanjo, 2000). Food services view consumer availability as the cornerstone of their business. Major benefits of effective forecasting according to the article include: increased product availability to the consumer, lower inventory levels along the supply chain, and true customer/supplier partnerships. McDonald’s being able to accurately keep their inventory in line with their expected consumer demands helps to ensure they are capable of delivering the product their customers desire.
References
Adebanjo, D. (2000). Identifying problems in forecasting consumer demand in the fast moving consumer goods sector. Benchmarking, 7(3), 223-230. Retrieved from http://ezproxy.liberty.edu/login?url=https://search-proquest-com.ezproxy.liberty.edu/docview/217357295?accountid=12085
The ability to forecast consumer demand accurately is of great importance to companies in the consumer market. The food industry, in particular, views consumer availability as the cornerstone of their business. However, many companies concede that their forecasting process does not perform as well as they would wish. A group of forecasting and demand managers from some of the leading UK food companies, with the support of Leatherhead Food RA, examined the problems associated with their functions over an 18-month period. This paper presents the key findings from their collaborative work.
McDonald's wants to be assured of delivery. (October 2012). Retrieved March 27, 2017, from https://www.supplychainmovement.com/mcdonalds-wants-to-be-assured-of-delivery/
McDonald's aim to never run out of product is paying off as they see growth in the supply chain management model. Utilizing forecasting by demand, they maintain their product supplies as needed and develop relationships with suppliers to ensure accurate ordering. Their customers win by having the product they desire at the time they want.
Sozzi, B. (2016, January 03). 3 predictions for what McDonald's will do in 2016. Retrieved March 27, 2017, from https://www.thestreet.com/story/13409843/1/3-predictions-for-what-mcdonald-s-will-do-in-2016.html
The McDonald's franchises have seen tremendous growth in 2015. This is largely due to forecasting demands of the consumer and by keeping inventory in stock. Offering all day breakfast helped to boost sales to customers who hadn't visited the store in previous months prior to the launch.
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