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FedEx Demand Forecasting Strategies

FedEx uses both qualitative and quantitative forecasting models to predict demand for its global logistics services. As demand drivers include external factors like customer needs across many countries, accurate forecasting is important for marketing, sales, supply chain, and financial planning. To improve predictions, FedEx should follow demand forecasting steps like determining forecast use, selecting items to forecast, setting time horizons, choosing models, gathering data, generating forecasts, and validating results at different levels of detail. This will help FedEx assess forecast accuracy and aid target progress.

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204 views3 pages

FedEx Demand Forecasting Strategies

FedEx uses both qualitative and quantitative forecasting models to predict demand for its global logistics services. As demand drivers include external factors like customer needs across many countries, accurate forecasting is important for marketing, sales, supply chain, and financial planning. To improve predictions, FedEx should follow demand forecasting steps like determining forecast use, selecting items to forecast, setting time horizons, choosing models, gathering data, generating forecasts, and validating results at different levels of detail. This will help FedEx assess forecast accuracy and aid target progress.

Uploaded by

arisu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Guardiana, Wyeth Gain Mayrong BM701A LOGISTICS

MANAGEMENT

ACTIVITY

Answer the following questions:

1. Identify the demand drivers present in the case study.

* The demand drivers presented in this case study was External demand drivers. FedEx
employed a structure methodology for improved communications and integration with other
departments within the organization and with their customers. The company predicts the
potential demand for their logistical services by collecting information and forecasting. FedEx’s
service covered all around the globe, making services available for customers from many
countries and almost every place.

2. Analyze and describe the forecasting model/s being used by FedEx.

* The forecasting model that is being used by FedEx are Qualitative and Quantitative models.
FedEx used Quantitative models primarily for existing/current technology products and
involves a variety of mathematical techniques. They also used Qualitative models because it is
useful for creating forecast estimates for their new services. They used knowledge and
intuition of the products, doing market survey, having jury of executive opinion, and using
Delphi method. FedEx formulate accurate forecasts and create wiser decisions in terms of
capacity planning and overall operational design.

3. Determine the forecasting need/s of FedEx.

* The forecasting needs of FedEx are Marketing, Sales, Supply chain, and Finance and
accounting.

4. Recommend ways for FedEx to achieve accurate predictions of their forecasting need/s using
the steps of demand forecasting.

1. Determine the used of the forecast. Depending on a specific sector or organization, FedEx
must classify their needs.

2. Select the items to be forecasted. In order to achieve accurate demand prediction, FedEx
must evaluate the specific products, levels and units of measurement and demand history
provided.

3. Determine the time horizon of the forecast. The relevant time horizon which will be used
in the forecast must be identified by FedEx.

4. Select the forecasting models and methods. FedEx must understand where the
commodity and the relevant method to be used in the forecast are in its lifecycle.
5. Gather the data needed to make the forecast. FedEx must collect some survey or
observation data or facts, evaluate demand versus sales, and remove data errors.

[Link]
Guardiana, Wyeth Gain Mayrong
BM701A LOGISTICS MANAGEMENT

6. Generate forecasts. Based on promotional schedules and revenue projections, FedEx must
audit the outcomes of forecasts.

7. Validate and implement the results.

To ensure the highest degree of precision possible, FedEx must check the forecasts at different
levels of detail and units of scale. In order to aid target progress, recent forecastaccuracy will also
be assessed during this period.

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