Forecasting Failure for BB&B

Bed Bath & Beyond Inc. forecasted less than analysts estimated for quarterly profits and in turn dropped in market shares. This is the most they have ever dropped since their first shares in 1992. Since store sales in the firsts quarter had risen, analysts projected a gain; however, the forecast was less than estimated causing a huge drop.

Some people think that forecasting is silly and some people think forecasting is something a company should live by. Clearly, Bed Bath & Beyond showed that forecasting is important and it’s important to do correctly. Forecasting  helps companies in so many ways to project estimations for the future based on the past. Bed Bath & Beyond showed the errors that can occur within forecasting.

I think that it’s important for a company to forecast because otherwise they have nothing to base their decisions off of.

Obviously a company can over forecast or under forecast, which can cause problems for the company. Do you think it is better to under forecast or over forecast? Is forecasting even important? How could Bed Bath & Beyond have avoided this problem?


2 thoughts on “Forecasting Failure for BB&B

  1. I personally believe that forecasting is a key component to the success of a business. By a business being able to properly forecast, they are able to maintain and make better decisions in the process of their company’s production, inventory, personnel and facilities. I think that Bed Bath & Beyond could have avoided this problem if they had monitored their forecast accuracy. It seems as if they had misinterpreted or misused their techniques and if they had been able to monitor their forecast they would have been able to add to their business success rather than have had their market shares drop.

  2. I wrote about forecasting and I think forecasting is extremely important for any business from a strategy point of view because having inventory (whether physical or product) at the right time is essential for making profits. A business must buy right amount of raw materials to produce right amount of goods for consumers. If this is not the case then either the business will not be able to serve the customer due to shortage or will have to hold extra products and incur storage costs.

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