Supply Chain Management and Time Series Methods

Topics: Supply chain management, Time series, Supply and demand Pages: 5 (1296 words) Published: October 5, 2010
Executive summary
1. Introduction
2. Background
3.1 Costco history (departments, countries, organization, structure of Costco) 3.2 Why enter Australia?
3.3 Cash & Carry
3.4 Retail logistics (pallets in store)
3.5 Wholesale & retail
3. Discussion
4.6 Product (Quyen)
* Target customers: for women at big events such as: Mother Day n Christmas. * Peak season at Oz – cold weather from May until Xmas. * Another high season on Valentine Day in Feb.
4.7 Diagram (Quyen) GANTT chart
4.8 Forecast (Quyen)
4.9.1 Reason –
Supply chain management decisions are based on forecasts that define which product will be required, in what amount, and when they will be needed. The demand forecast becomes the basis for companies to plan their internal operations and to cooperate among each other to meet market demand. All forecasts deal with four major variables that combine to determine what the market conditions are likely to be: * Demand

* Supply
* Product characteristics
* Competition environment

4.9.2 How –simulation method
There are many ways to create a forecast for a certain goods that a planner can use just one or combine many methods together. According to Chopra and Meindl define these methods as follows: 1. Qualitative methods

Rely upon a person’s intuition or subjective opinions about a market. These methods are most appropriate when there is not much historical data to work with. 2. Causal methods assume that demand is strongly related to a particular cause, such as environmental or market factors. 3. Time series methods are based on the assumption that historical patterns of demand are a good indicator of future demand, and that over a period of time, demand can be charter in three different ways: as an underlying trend (flat, up , or down), as a circle (daily, weekly, seasonally , and so on), and as irregular fluctuations (peaks or valleys) over time. 4. Simulation methods are a combination of causal and time series methods will imitate the behavior of consumers under different circumstances. With the product of Cadbury’s Roses boxed chocolate, Purchasers of Costco’s confectionery Dept will forecast the consumption of this product base on 4th methods – simulation – that will be described in detail as below: Simulation method comprises 2 methods causal and time series. Base on causal method, chocolate’s demand is effected too much by: 1. Events: Christmas, Mother Day,

2. Price: better than other distributors or retailers.
3. Reputation of products and distributors.

In the other hand, with time series method, chocolates consumption forecast is subjected to: * 4. Last year sales history.
* 5. Market survey of chocolate consumption in Australia.

4.9.3 How-data:
1. Events: Base on the retail consumption report of ABS () until July 2010, there are big changes on demand in big events of the year such as: Christmas (December), Mother Day (second Sunday of May) and Valentine Days (14th Feb). Chocolate demands increase about 100% in Christmas , 60% on Mother day and around 40% in Valentine day compare with the normal need in January, March or April. Moreover, when the winter comes in, consumers ‘ interests in chocolate go up about 20% because it is quite fine to enjoy confectionery in cold weather. These events are the opportunities for people to show their feelings to their loving persons and say “Thank you” to them because Roses’ slogan is “Thank you very much” 2. Price: As above mention, Costco guarantees that their price always lower than others distributors 15-25% base on some their policies: * Cash and Carry

* Membership fee.
* Good relationship with suppliers.

3. Reputation of products and distribution:
* Costco:
* Cadbury:
4. Last year sales history:
5. Market survey of chocolate consumption in...

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