Ever since we have done that forecasting activity in class last week, with us being in charge of ordering the right amount of boxes of inventory for the upcoming week, so we are not short or waste our product. It made me think about the time, when I worked at my Dads Subway franchise store. I felt like it was the perfect example since the process of predicting a future, underlined the basis of all business decisions mostly to do with personnel, production, and most important Inventory. I never really realized how important it is to make sure you have the upcoming inventory absolutely as close as you can. Thats not all in subway, I believe there are alot of things to do with forecasting at our store, such as the demand forecast that leads to the price on the menu, depends on how many costumers like that sandwich,or even new products that come in with different promotions. We change up the price on the menu due to new items, class favorites, or just simply because of the economy. Now if plan on changing the prices, we cant just charge someone $15 dollars for a sandwich when it only cost 6 bucks. We have to use the actual demand for that sandwich, as well as forecast store sales around us in the same region, understand what there selling price is and place a predicted demand of the data we know. The trick is not to place the price higher than your competitor and not lower that what you are need to make a revenue. Which leads us to forecast the right price so in the end we win both ways.
Not only does price have to do with subway Every 2 weeks we have to do an inventory count at our store, to see what we need or what was used more, making sure we dont miss a step since it is vital for our store to be fully stocked at all times. For instance if we run out of lettuce that day and realize that we still have 2 more days till the next inventory to be here, where in big trouble since we did not accumulate enough boxes of lettuce for that week. Which now leads us to shortage of lettuce for costumers that really need lettuce on their sandwiches. That applies to all meat products, vegetables, cheese, new supplies and containers. You guys might think OMG, this must be such a hassle, it kind of is, but what made it easier is the stable historical data that we have stored in the computer as well as a check list for previous entries of boxes we have sold before. This includes all the information of product we use from months to weeks all the way to how much of the product we have used daily. This helps us alot to forecast our future weeks up ahead, the data can be all the way from 2 years back. I guess the forecasting Approach, is similar and alike as the Quantitative approach using existing products and current technology that is stable and consists of historical data. You might think that there is no mathematical approach but there is since we use our costumer data , as well as the gross income, to make the right decision so we dont wast our product nor are we running out.
Forecasting is not only big at our store it defines what we do everyday, to make sure that we never have a problem. Even Forecasting how many employees you want to work for that day. If we know a monday is going to be slower than a saturday, we rather put two workers instead of 4, how is that done by forecasting daily through our business revenue patterns through trend projection of monday to Sunday.
I guess the real question is what would franchises and business like us do with out forecasting? Have you ever gone to a place and found out that they ran out of something you really wanted? What other Managment Operations are used that I have not included in here?
Hope this was interesting 🙂