Harmonds Foods

Harmonds foods faced many problems but forecasting sales was the main issue which in turn was the cause for ill planned advertising, the misuse of the workforce, potential loss of sales, angry customers and increased expenditures from over ordering of raw material. The surplus expenses in advertising that was not approved in the budget was added to the following years making it seem that Harmonds foods’ sales exceeded the forecast which raised the market value of the common stock. This resulted in the treats division being 4 million dollars unfavorable in the last quarter. Management was able to identify some key demand factors that would result in better predictions and areas where they should place emphasis, to improve their forecasting moving forward. For one, they were able to recognize their consistent increase in market share and commodity growth. They were also able to identify cyclical changes in the demand for treat due to seasonal changes. Looking at their sales results by month over a period of time gives them visibility in regards to their target customers’ spending patterns and how the time of year impacts the focus and drive of their sales force and factory workers. It also helps identify the overall impact of each specific marketing effort.
Season promotions and advertising affect the demand. If you forecast correctly to promote and advertise during strategic times, manufacturing and inventory controls would be managed better to increase or decrease supply accordingly. If market research and analysis tells you that season experiences increased demand and you under supply, then the result is loss in potential sales. Equally, if you do not promote and advertise effectively then the result is less demand both from dealers and consumers. If you cannot make accurate demand predictions then your raw material purchasing