MANAGEMENT

OF

BUSINESS SBA (Unit 2)

Centre #: 100072

School: Central High

Teacher: Mrs. Callaghan

Territory: Jamaica

Year: 2020

An investigation into the forecasting techniques used in Whitfield Bakery.

TABLE OF CONTENTS
Contents Page

acknowledgement……………………………………………………………………1

Introduction………………………………………………………………………… 2

Title………………………………………………………………………………... 3

Aims and Objectives…………………………………………………………….... 4

Justification……………………………………………………………………….. 5

Methodology……………………………………………………………………… 6

Background of the Business…………………………………………………….... 7-8

Literature Review……………………………………………………………….... 9-11

Data Presentation…………………………………………………………………. 12-17

Analysis and Interpretation……………………………………………………….. 18-19

Conclusion………………………………………………………………………... 20

Recommendation………………………………………………………………….21

Appendices……………………………………………………………………….. 22-23

Bibliography………………………………………………………………………24

ACKNOWLEDGEMENT
First and foremost we would like to express profound gratitude to Almighty God for giving us

the strength to complete this School Based Assessment (SBA). We would also like to convey our

heartfelt appreciation to our teacher, Mrs. Callaghan, who worked acidulously with us to ensure

that this assessment was completed. Thanks to the employees at Whitfield Bakery who helped us

to gather the relevant information essential to this SBA being completed.

INTRODUCTION
This School Based Assessment is designed to give the reader detailed information about the

forecasting techniques used by Whitfield Bakery in May Pen Clarendon. It gives information

about the method/s of production utilized in the business. It also seeks to highlight the realized

benefit/s and drawback/s that Whitfield Bakery encounter as a result of the forecasting technique

utilized.

TITLE
An investigation into the forecasting techniques used in Whitfield Bakery.

AIMS/OBJECTIVES
Aims:
  To provide the reader with credible information about the topic.

 To gain knowledge about the different types of forecasting techniques.

 To be concise and effective as possible.

Objectives:

 To find out the forecasting technique used by the business.

 To find out if the method of production utilized within the business is influenced by the

forecasting techniques in place.

 To ascertain the realized benefit(s) and drawback(s) the business encounter as a result of

the forecasting technique utilized.

 To access the extent to which the forecasting technique(s) can be attributed to the success

of the business.

JUSTIFICATION
 The researchers have chosen the topic because Whitfield Bakery has been using

forecasting technique(s) to get pertinent information as it relates to production, especially with

regards to projecting future sales. This will be used to meet the needs of customers, and as such

the researchers intend to find out the forecasting technique(s) used in the business. Forecasting

plays an integral role within any organization when effectively implemented and the most

appropriate technique can make a difference as to the success or failure of the business since it

determine the quantity of every resources that would be needed in the transformation process.

The topic was chosen with regards to Whitfield Bakery due to the fact that the items they

manufacture is of a perishable nature, as such it is important to ascertain the demand so as to

avoid spoilage which can ultimately affect the profit margin of the business.

BACKGROUND OF THE BUSINESS

 Whitfield Bakery is one of Jamaica’s original country bakeries, the peoples favorite bakery

was founded by Walter Christie over seventy-five (75) years ago. Whitfield Bakery is now

owned and operated by the husband and wife team of William and Pauline Fearon, they have

acquired Whitfield Bakery and Pastries, a brand locally and internationally recognized for its

bun, bulla and bread. Whitfield’s main bakery is located at 4 Western Park, May Pen Clarendon

Jamaica. According to the Management of Business textbook by Jerome Pitterson, forecasting is

an estimate of the possible future levels of cost, sales, stock or production. Forecasting

techniques are classified into two categories, qualitative forecasting techniques and quantitative

forecasting techniques. The qualitative forecasting techniques have four (4) techniques they

include:

 Sales force composite

 Delphi Method

 Consumer Survey

 Jury of experts or executives

The quantitative techniques have two (2) techniques they include:

 Moving average

 Least square regression

According to the employees at Whitfield Bakery the business uses all the methods of

production. This is due to the nature of the goods being produced. With the methods of

production used in the business, it is able to, with the aid of the forecasting technique, project

the volume of production and reduce on waste. Consumer survey is the forecasting

technique used by the business as it is deemed useful to find out from consumers exactly
what they desire. This helps the business in numerous ways although at times the customer

feedback is deceiving.
 LITERATURE REVIEW
According to https://www.investopedia.com forecasting is a technique that uses historical

data as inputs to make informed estimates that are predictive in determinining the direction of

future trends. Businesses utilize forecasting to determine how to allocate their budgets or plan for

anticipated expenses for an upcoming period of time. The textbook Management of Business for

CAPE Examination by Jerome Pitterson states that forecasting techniques are divided between

Micro-forecasting and Macro-forecasting. Micro-forecasting deals with a prediction of the future

performance of a specific demand of the firm. Macro-forecasting deals with making prediction

for the overall market. Forecasting techniques are classified under two categories, these are

quantitative forecasting and qualitative forecasting. Quantitative forecasting techniques are based

largely on opinions; a quantitative forecast uses historical data and previous experience to

forecast sales. This type of forecasting is preferred by most firms once the necessary data is

available. It is believed that the pattern of sales in the pass will continue into the foreseeable

future. Two of the most popular quantitative techniques are: moving average and least squares

regression and moving average is particularly useful when demand randomly fluctuates. Since

the techniques are taking an average of a subset of data, it eliminates the fluctuation while

creating a forecast.

Least squares regression

This is a part of the broader concept of linear regression analysis. The term “regression” is seen

as the functional relationship which exists between two or more correlated variables. In addition,

the term “linear regression” defines a situation where the relationship between the variables

results in a straight line.

 Qualitative forecasting techniques focus on value judgment and the individuals opinions

of the future outcomes. The predictions are normally used when there are no historical data about

the performance of the product- that is in the early stage of the life cycle. The following are

common quantitative techniques: Sales force composite, Delphi Method, Consumer Survey and

Jury of experts.

Sales force composite

Sales force composite technique relies on the sales force of the firm to make projections of the

future levels of demand for the firm’s product. Since the sales force interacts regularly with

customers, they are furnishing with a repertoire of knowledge about trends in the market,

changing customer choice, the product and competitor’s behavior. This method of forecasting

uses the opinion of sakes people to formulate prediction for sales in the future. One point to note

though, is that this type of forecasting is best used in conjunction with other techniques.

Delphi Method

This method uses a group of experts anonymous to each other to make a forecast of sales, among

other things. The way the method works is that when forecast is received from each member of

the group it is summarized and sent back to the other members. The firm will note the concerns

and the group will revise their forecast as needed, until a final prediction is reached. This can be

a long tedious process but the results are normally more accurate than the other qualitative

techniques. The Delphi technique has been credited to Norman Dalkey and his colleagues from

RAND Corporation for the work they did mid-1900s.

 Consumer Survey

This is a form of marketing research that is used to ascertain the level of potential demand for a

firm’s product. In trying to make a forecast of future sales some businesses may seek to gather

information from the very people who will be purchasing the product-that is, the customers.

Since it is impossible to question every potential customer, a representative sample is usually

selected. Information collected through consumer surveys is usually gathered through the use of

research tools such as questionnaires and interviews. The information collected is then analyzed

and a forecast can be generated about the buying intentions of prospective customers.

Jury of experts

This technique is based on the notion that the managers of the different functional areas of the

firm are armed with knowledge that can be used to predict sales. How this technique works is

that the sales forecast of the executives are combined and averaged to ascertain a final prediction.

The group of executives or jury of experts may be taken from departments of the firm including

finance, marketing, and production or purchasing. This would mean that the forecasting team

would have diverse knowledge and experience and, by extension, opinions.

Overall each of the technique is quite useful if implemented and used effectively. The one

chosen however should be appropriate for the nature of operation.

 METHODOLOGY
In order to obtain pertinent information for this School Based Assessment (SBA) the

researchers used both primary and secondary sources to analyze, interpret and evaluate this

research correctly. Primary source are designed to obtain first-hand information. The primary

source used is a questionnaire. According to www.jaypeejournals.com a questionnaire is a series

of questions asked to individuals to obtain statistically useful information about a given topic.

The benefits of using a questionnaire are:

 It is cost effective

 It is easily administered

 It facilities survey of a large group

The researchers issued a total of ten (10) questionnaires to employees at the Whitfield Bakery in

May Pen, Clarendon. Questionnaires were issued to a total of five (5) males and five (5) females

on the 14 of February 2020. Questionnaires were collected on February 16, 2020.

The researchers also used secondary sources. Secondary source is the access to information that

has already been researched. The information obtained from these secondary sources is reliable

and valid being that they are current year information and they include factual statistics.

Information were extracted from, book, journal and websites for this research.

Because the researchers had an early start, the common limitations were not faced.

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 DATA PRESENTATION

Question 1: What type of business is in operation?

Pie chart showing the type of Business in operation

Partnership
Sole trader
Company

Figure 2 showing the number of respondents that participated in the research

The pie chart above clearly indicates the type of business in operation. All of the respondents

(100%) stated that the business is a sole trader.

With this type of business, the owner reaps all the profit but bears all the loss at the same time.

Independence is also a benefit to be realised from such operation.

Question 3: What is/are the method(s) of production used within the business?

Cell

Job
Cell
Job
Batch
Batch Flow

Flow

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Figure 4 showing the method of production that is being used within the business.

It is clearly indicated in the bar graph above that 10% of the respondents believes that the cell

method is used; 20% selected job, 40% selected batch and the remaining 30% selected flow.

The method of production used by the business seems to be Batch. This method leads to the

homogeneity of the items produced.

Question 4: In order to know how much to produce, is the decision influenced by forecasting?

90%

80%

70%

60%

50%
Yes
40% Series 3

30%

20%

10%

0%
YES NO

Figure 5 showing if the decision made is influenced by forecasting.

The majority of the respondents (80%) are of the belief that forecasting influences the

decisions regarding the method of production, the remaining 20% does not share that view.

The method of production is indeed influenced by the forecasting outcome, as such, keen effort

need to be made in ensuring that the technique is as precise as possible.

Question 5: What is the forecasting technique(s) utilized by the business?

Pie chart showing what is the forecasting technique

used by the business
10%

Delphi Method
30%
Consumer survey
20% Sales force
Jury of Experts

40%

Figure 6 Pie chart showing forecasting technique used by the business

The pie chart depicts that ten percent, 10% of the respondents are of the belief that the method of

production used is Jury of experts; 20% selected sales force composite; 30% selected Delphi and

the remaining 40% selected consumer survey.

The method used seems to be consumer survey where the input of consumers is sought to project

future sales.
Question 6: What is/are the realized benefit(s) of the technique(s) being used?

Responses Percentage

Increase in profit 30%

Reduction in waste 20%

Customer satisfaction 50%

Figure 6 showing the realized benefits of the technique(s) being used in the business

The table above is displaying that 30% of the respondents believes that the business realise and

increase in profit with the use of the technique; 20% said reduction in waste and the remaining

50% said customer satisfaction.

Customer satisfaction seems to be the most realised benefit from the use of the forecasting

technique. Where customers are satisfied then the business is destine for greatness.
Question 7: Is there any challenge(s) encountered with the strategies in place?

No
Yes
NO

YES

0% 10% 20% 30% 40% 50% 60% 70% 80%

Figure 8 showing the challenges encountered with the technique in place

The bar graph shows the percentage response to if the business encounters challenge with the

technique in place; 70% of the respondents said yes and the remaining 30% said no.

It is palpable that the business encounters challenges with the technique in place. This could be

due to customers not being truthful in their response.

Question 9: To what extent would you attribute the success of the business to the forecasting

technique used?

Responses Percentage

To a minimal extent 20%

To a great extent 70%

To a reasonable extent 10%

Figure 9 Table showing the extent to which the respondents would attribute the success of the

business to the forecasting technique used

The majority of the respondents, 70%, based on the table, attributes the success of the business to

the forecasting technique used to a great extent; 20% does so to a minimal extent and the

remaining 10% does so to a reasonable extent.

From all indication the respondents attribute the success of the business to the forecasting

technique being used. This could be due to the involvement of the customers.
 CONCLUSION
The researcher has taken the timeout to conduct a research on the forecasting techniques

used by Whitfield Bakery in May Pen Clarendon.

Forecasting is a decision making tool used by many businesses to help in budgeting,

planning, and estimating future growth. Forecasting technique is categorized in two (2) groups.

They are qualitative and quantitative techniques. The qualitative technique consists of:

 Sales force composite

 Delphi method

 Consumer survey

 Jury of experts

The quantitative technique consists of:

 Moving average

 Least squares regression

The forecasting technique used by the bakery is consumer survey, which is said to be beneficial

to the success of the business. The technique also influences the methods of production as it

helps to determine volume of production. Additionally, the business is said to encounter

drawback with the use of the technique as it seems that customer feedback is not always

accurate.
 RECOMMENDATION
The researcher see it fit to make the following recommendation:

 That the Bakery continue to use consumer survey as a forecasting technique, but try using

another method that is applicable to the nature of the business.

 That the business not only rely on what the customers say but implement other method to

motivate the customers into converting their words into action; for example promotion.

 That the business works at being productive so as to ensure that all the stakeholders are

catered for.

 Ensure that the business is operating profitably, as it is often noticed that after Easter

holiday the business has excess stock that they have to sell at a low price. This is to show

that forecasting needs to be improved upon.

 APPENDICES
Please tick the answer of your choice

I) Gender: Male [] Female[]

1) What type of business is in operation?

Sole trader [] Partnership [] Company []

2) How long has the business been in operation?

1-5 years [] 6-10 years 11-15 years [] 16 years and beyond []

3) What is/are the method/s of production used within the business?

Batch [] Flow [] Job [] Cell []

4) In order to know how much to produce is the decision influenced by forecasting?

Yes [] No []

5) If yes what is the forecasting technique/s utilized by the business?

Delphi [] Jury of experts[] Sales force composite [] Consumer survey []

6) What is/ are the realized benefit/s of the technique/s being used?

Increase in probability[] Reduction in waste [] Customer satisfaction []

Other []

7) Is there are any challenge/s encountered with the strategies in place?

Yes [] No []

8) If yes how have you combated the/these challenges?

9) To what extent would you attribute the success of the business to the forecasting technique

used?

To a minimal extent [] To a great extent [] To a reasonable extent []

10) Does quality influence the forecast figure arrived at?

Yes [] No [] To some extent []

 Bibliography
[ CITATION Jer14 \l 8201 ]

[ CITATION Whi17 \l 8201 ]

[ CITATION Inv17 \l 8201 ]

[ CITATION Bus19 \l 8201 ]

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