RESULTS FROM THE INTERVIEW: FORECASTING

As we discuss before, a forecast is a prediction of what will occur in the future.

Puan Roslina Ahmad forecast the demand for her products by using qualitative forecast method. This means she will forecast customers’ based on her judgment and past experience. She said that she never use any quantitative forecast method in determine customers’ demand behavior.

She will forecast demand in short range to midrange up to at least next year’s demand. Lyn Bakery and Café’s demand behavior is seasonal pattern. The demand for her cakes will increase during celebration days like mother’s day and teacher’s day in May, father’s day in June and of course during school holidays whereby bride and grooms will buy their wedding cakes (as people love to get married during school holiday).

For biscuits, the demand will increase extremely high during festive seasons, which is Hari Raya Puasa where people nowadays thought it is easier to buy biscuits than make it by themselves.

We will go deeply on how she forecasts her demand for his biscuits on August (specifically on Hari Raya Puasa festival).

We have mentioned before that Puan Roslina Ahmad predict her demand based on last year’s performance.

Lyn Bakery started its business on 2009. So, for that particular year, the demand for her biscuits was not so good. But in 2010, people getting to aware of the existence of her products. So, she forecast demand for her biscuits for August will be ten percent of her total sale for the whole year. The total sale for that particular year was RM70, 000 (not the real amount). So, ten percent from RM70, 000 will be RM 7,000.

Puan Roslina said that she doesn’t worry if all of RM7, 000 of biscuits didn’t finished by August. This is because, what she is going to do is she will put them at her shop to meet next month’s demand.

Those forecast biscuits that cannot meet the demand or she called them ‘balance group’ or we called them forecast error, will not be selling at any discounted price.

She said, she does not want to sell her forecast error at discounted price because she spent the same cost and effort for forecast error as same as other forecasted, inventories that meets demand during Hari Raya Puasa.

She predicts the demand for this year 2011 will be 30 percent from the total sale for the whole year. She increases the target from 10 percent in 2010 to 30 percent in 2011 because she is confident on her customer. She said that this year, her business is stable enough to compete with other bakery. Plus, her customer has increase their awareness towards her products because she has done extremely on promoting her bakery as well as her products.

Comment on forecast:

Lyn Bakery will face problems if forecast not meet demand for this becoming Hari Raya Puasa. Puan Roslina maybe expect too much on her customer. We would like to suggest to Puan Roslina to do some research on how to forecast the demand. In addition, she has to learn the forecasting process. From that, she can make a realistic and achievable forecasted demand.