Psst!!! Yes You…They are Watching!



What if you were told that while you shopped, you were being watched not only by store cameras to catch theft, but also for data collection? That somewhere, your actions were being examined and discussed? How would you react to that? Luckily, many of you did not know of this creepy, yet accurate forecasting method until now.

Although tracking customers have been around for many years, security companies have finally broke into the market, advancing the cameras abilities by drawing “heat maps” to assess buying behavior, have better strategic capacity planning,and  being able to guess shoppers’ sex and  age. According to market-research firm IDC, $1.3 billion will be spent on analytics software this year to make sense of the data collected, and potentially increasing forecasting accuracy.

Gordmans, a department chain store that can be found in places like Champaign, Naperville, and Rockford has used cameras as their technology tracking source. In one of their stores, 35 cameras were placed throughout the store and used to track the movement of 29,000 shoppers over a three week span. This footage was then turned into heat maps in order to show which popular departments of the stores consumers gravitated to the most(fashion items) and which departments in the store consumers ignored(home furnishing). It also told them that a large flux of Asian customers frequented their store, which prompted the manager to have Asian salespeople to greet them. The data was also analyzed by using a software from RetailNext where through animation, showed managers how to change the layout of 90 stores to increase sales. These changes helped increase Gordmans’ conversion rate by 3%.

American Apparel has also adopted this ideology by using RetailNext. Stacey Shulman, technology chief of American Apparel, says she craves “the same type of analytics in-store as I can get online.” The software allowed them to tell how many customers came into the store and the time of day. Before using this forecasting method, American Apparel store managers thought they were busiest when sales peaked, when in actuality they were typically off by two hours. By using the existing cameras that are mounted above the doors as you walk in, RetailNext has been able to help American Apparel with capacity. The traffic data collected feeds into the staff scheduling software which allows the store to be able to staff accurately based on how much traffic the camera picks up.

These new innovative software’s touch on many topics we have discussed throughout our course. Both stores have used them as a means to have better forecasting data. It not only gets to track how many purchases, but look at the behaviors and characteristic of those that buy, making it easier to predict their sales. It has also allowed stores to accommodate their capacity needs by using more employees during peaks to create more sales.

As online retailers gain competitive advantage, do you think this is a good idea to boost sales in stores? By gaining more accuracy on their customers, can they win them back?


We Snoop to Conquer

Analytics Software Mines the Store

How Forecasting May Forever Change Hollywood

Is it possible to forecast how much money a movie will make just by reading a script?  Statistics professor and movie guru, Vinny Bruzzese says you can.

Mr. Bruzzese and his team have supposedly come up with an equation to forecast how much money a movie will make in the box office, just by reading the script. For only $20,000 his company, Worldwide Motion Picture Group, will read any movie scrip and will compare it to other narratives with comparable story lines, Facebook likes, and data taken from focus groups consisting of over 1,500 moviegoers. With this information, he can dissect any scrip or screenplay, and help directors see how much money their movie will (or will not) make.

Based on statistics and moviegoer opinions, Bruzzese reads a script, and uses data to determine if characters are likable, or should be changed. He uses corresponding data with certain celebrities to determine how many people will attend a movie just because that person is in the film. His recommendations usually come in a 30 page report, and include both minor and large corrections.  Mr. Bruzzese also said that he will not hesitate to inform a writer that the movie is crap, and characters need to be developed into something completely different in order to for the audience to be engaged enough to see the movie in theaters.

So far, Mr. Bruzzese has reviewed over 100 scripts in Hollywood, including “Oz the Great and Powerful,” which earned $484.8 million in the box office. His services also include reviewing scripts for TV shows and Broadway productions. Although his price may be high, Hollywood directors seem to be interested in his operation, and many have found it to be incredibly useful. However, he clearly states to each screenwriter that he will not be held responsible if the movie flops, and his equation is not correct. As we learned, forecasting is rarely 100% correct, and is used as more of a guideline than an indicator of fact.

But what are the implications of using statistical forecasting on an art form like movie making?  Some people are not as excited about the idea. One movie critic wrote, “It’s the enemy of creativity, nothing more than an attempt to mimic that which has worked before. It can only result in an increasingly bland homogenization, a pell-mell rush for the middle of the road” (Ol Parker).

So do you think forecasting of new moves will inhibit creativity in scriptwriters? Do you think Hollywood directors should only focus on their movies making the most amount of money? Will Hollywood movies just become cookie cutters of the previous ones before them? Or do you believe an equation made for forecasting movie success help make new movies better?



How to forecast $43.6 billion?

Apple has finally decided to give its shareholders back more now from the profit of $145 Billion. The shareholders demanded more return even though Apple posted their first decline in decades. Apple heavily relies on new product launches to make the mass amount of money; knowing this fact the company has decided to not launch any new products until fall and 2014. The company has to give the raging market a rest for a couple of months before they come out with something that will make the crowd go wild. The fall in the revenue has challenged the company to think of something truly innovative that will gain a higher popularity in sales than its competitors.

 The company did better than forecasted $39.2 billion; the actual revenue was $43.6 billion, exceeding the forecast by $4.4 billion. Apple had under forecasted due to past months revenue being over forecasted. As we learned in class, companies usually use naïve approach to forecast for their next month. Apple has been over forecasting since their iPhone sale success. Apple is not coming out with new innovative technology, their revenue has been declining therefore forcing the company to under forecast their revenue. This is the error of using forecasting because the company might not sell the same as the previous month because the company has not been able to come out with a product that would stabilize their revenue. In Apple’s case new product launches raise their revenue and place them on top of other companies.

 Many people are thinking that since Apple is not going to be launching any new products for a few months, the market is bound to fall. Samsung has been giving Apple good competition and now has been able to take over the market with recent launches. If Apple waits until fall to hit the market again with something innovative, will Samsung have taken over the market? Will Apple be able to compete with Samsung after staying out of the market for a couple of months? Only time will tell how innovative the new Apple products will be. Will the Apple products be able to beat the Google Glasses? Many people are not really sold on the new idea of using glasses as their cellphone but again no one can really tell how the market will react to products until they are launched. Before Steve Jobs died, he mentioned that his new invention was to make the TV remote user friendly. He emphasized that the remote was too complicated with so many buttons. This might be just the product to beat the Google Glasses or not. We all will have to wait for the next invention until fall of this year to find out.

Click here to read the article:

Sources: Gupta, Poornima. “Apple unlocks more cash for investors as profit slides.” Chicago Tribune 23 April 2013, Web. 28 Apr. 2013.


Inventory equals cash?

Just few weeks ago I didn’t know the importance of forecasting until recently I learned how important it is to forecast in any business. I never thought of inventory as being cash I just thought of it as a bunch of stuff, and materials. I found this article in Forbes magazine that talks about how inventory is your cash. It discuses how you are supposed to treat your inventory, and how you are supposed to track all your inventory so that you can gain more cash then losing cash and better business that will make your consumers happy.

Having a business is not just about buying and selling you have to pay attention to what’s coming in and what’s going out and in order to do that you have to track everything. My family has a business and when they are doing their orders they do forecast everything. First time I saw them I didn’t know what they were doing until recently when I learned about it more. It’s not about having a lot of inventory in your business you have to see how much was sold, how much you have in hands, and how much you think will sell that’s what you bring in. By tracking and forecasting your inventory it will save you a lot of money because you don’t extra inventory sitting in stock that will not sell. The bigger the business you have the harder it gets to keep track of your inventory so that’s why everything has to be monitored so save you money.

As a business owner you might think you are keeping costs down, but without using the right steps it will get very difficult so you must track the entire inventory to make the business grow. For example, if you own a business that sells fresh products you want to make sure that you get new products in everyday you don’t want to order to much and it will stay there consumers won’t be interested in shopping there anymore because they don’t see fresh products. By forecasting and mentoring everything that’s coming in and going out will help you get fresh products everyday and will help your sells grow and be a successful business. This will also help you with product life cycle if a product was selling a lot and then it slows down you don’t want to keep ordering it for your inventory and it won’t sell. There are many systems to help a businessperson to track and forecast their products. There are special computers that will help just putting the information into the system and it will automatically tell you everything that you have and need in your inventory.

What do you think about inventory equaling cash?  Do you think forecasting will help in having better successful business?








The Cursed Shop

“Beware of this haunted shop I heard there was a kid who once entered this shop and never came out. His poor mother lives in misery because of her loss” said Cousin Noah. I still remember that day while my cousin and I were walking passing by this shop located in Arad Town. It was before 20 years but I remember it like yesterday, this shop was called the cursed shop, or the haunted shop. Furthermore the title (cursed shop) came because whenever a restaurant opens in this same shop after a while the business shuts down. By time people started believing that this shop was really cursed, it’s funny how some people are naïve.



I kept in mind this shop and the different restaurants that opened there; I said to myself there must be a reason behind this. Further investigation in this case I found out the reason was simple; the restaurants did not have good forecasts for the demands of the customers. A restaurant would open to operate and they would order for example a large amount of Kebab given it’s a restaurant serving fresh food they would have many Kebab left unfortunately some were already grilled and been ready to serve, this is just one example. Of course the forecasting was not the only reason, given the place of the restaurant, prices, and demand of customers played a role.

I believe that this restaurant could have avoided the risk by using the forecast starting from Qualitative method (using surveys or even second hand information.)Also using the Quantitative methods to forecast the demand and base the price on the forecasts.

Friday (11th may) class was an eye opening class, I always wanted to know how restaurants were able to survive and know exactly how much portion of meat, salads , fish , or any type of food to prepare each day. From the class exercise I leaned that there are different types of forecasts that addresses different categorize like (Economic, Technological and Demand forecasts.)Furthermore each method is suitable for a different case or scenario. There are two approaches to this matter the Qualitative  including ( Delphi method , consumer market survey , sales force composite) , and the Quantitative method including  ( Naïve approach , moving averages , exponential smoothing , trend projection , linear regression. )Moreover the manager has to know what type of forecast to use because each approach will give an answer however only one answer is accurate and reflects reality.





Do you believe that Forecasting is vital for any restaurant?

  1. YES
  2.  NO
  3. I didn’t read the article I just want to comment for the 5%

What do you think is the best Quantitative method to use for the restaurant?



More on restaurants failure click here:


Read The Future

Can anyone really read the future? We all know that this is not true but what I shall talk about relates to the subject hugely.


We learned a bit about forecasting, its importance to organizations and some of the different methodologies used, should those be qualitative or quantitative. I work as a business analyst and my company is in entertainment and events management and I am going to go briefly on how we utilize forecasting in our business.


We learned that applying forecasting techniques is easy once you know which method to choose. In my company we have a mixture of products. Some of which existed for years, some have been renovated and others will be introduced in the near future.


For products that have been in the market for a while we utilize the historical data to recognize patterns on evenly spaced periods. By looking at the growth rates and applying a moving average method we have been able to project demand and sales figures fairly.


With regards to renovated products we look at the elements our clients liked and move the product into that direction. The only way to get our hands on such information is by doing consumer market surveys. Make sure before you go ahead with the process that your sample represents your entire market. We have been in a situation where we projected huge revenues from a recently changed product. What went wrong is that the proposed changed came from a key client, a change the rest of our clients did not like and we ended up changing the product back.


The hardest of all in my opinion is forecasting a new product. I have learned from experience that the best estimates will always have a large percentage of error in this case. If you forecast less and the demand is more, you end up losing clients. If you forecast high and you end up not selling much then you have wasted resources that could have been better utilized elsewhere. What we do is that we relate the new product to another that has similar characteristics. Surprisingly, similar products will have similar market trends and growth rates. If it is a product we have no similar to we seek information from other companies, business professionals and the internet to utilize the best forecasting techniques.


Two things my company does after each forecast. One is we will do manual adjustments to the results. I know from the class that this step is the sales force composite. We will ask the heads of the department about what they think about the numbers. May be they have large number of clients lined up to buy or may be our biggest purchaser is not interested in buying anymore. The second is to look at the state of the economy and how other companies are doing and estimate their spending.


Which is the best forecasting technique? It all depends to me.


Why Guess When You Can Forecast?

In the last class we studied the concept of demand forecasting and its importance in the business environment, especially in the 21st century. This topic was particularly interesting to me since I have recently experienced problems related to inaccurate forecasting at work.

I work for a supply and distribution company that deals with the fast moving consumer goods (FMCG) industry. While previously we had only undertaken the distribution of home and personal care products, recently our company decided to add several food product brands to our portfolio. This was a strategic move since we are experienced in dealing with various Middle Eastern retail establishments. However, the mistake our team made was to purchase the product inventory from manufacturing companies without accurately forecasting the demand for those products.

The Role of Forecasting in Demand & Supply Planning

The result? We ended up with far more inventory than we could sell. Food products are perishable; their expiration deadlines are much shorter than for other consumer goods. As those expiry dates approached, a considerable percentage of the inventory we had bought was wasted in our own warehouse. Needless to say, the company suffered some heavy losses.

Few forecasts are absolutely accurate since the future is inherently uncertain. To add fat to the fire, many companies still use informal forecasting methods such as educated guesses by top management and intuition or “gut feeling”. Some use quantitative methods such as historical sales trends and adjust it according to the forecasting officer’s own personal experience or opinion. When forecasting methods are based on such subjectivity, how accurate can they really be?

Demand Forecasting

Concerned about the accuracy of my company’s forecasting methods, I researched various forms of quantitative and qualitative forecasting. I came across an article by Kesten Green and Scott Armstrong of Wharton. The article proposed that only structured forecasting methods should be used and more qualitative techniques such as focus groups, unstructured meetings and intuition should be avoided. Even when some judgment must be used (possibly due to the lack of sufficient data), Armstrong and Green (2005) recommended that forecasts should be based on more structured procedures such as the Delphi method or structured analogies. The structured analogies method involves using results from similar situations from the past to predict the outcome of the current situation using a structured, formal process.

Even when accurate forecasts are made, it is not always easy to implement them in business decisions. When research results reveal figures contradictory to what the top management expected, they may even be ignored. To increase the acceptance of forecasts, decision-making managers can be asked to agree on what methods should be used before any forecast results are presented. The scenario approach can also be used; decision-makers can be asked what steps they will take in different possible future situations, before revealing forecast results. For instance, the managers at my company could have been asked what they plan to do if forecasts reveal that demand is considerably lower than our inventory of food products, and what if demand exceeds supply. This way, they are more likely to act on the results of the forecast.

Whatever the method used, companies should focus on maximizing the accuracy of their forecasts. In today’s fast-paced world where competition is ready to grab your market share at the slightest miscalculation, I feel forecasting is critical to business success.