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MBA5016 Operations Management for Leaders Efficient Operation Capella University

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Capella University

MBA5016 Operations Management for Leaders Efficient Operation Capella University

Forecasting demands is a challenging task due to many factors, but it is not an insurmountable obstacle. Firm’s that understand the type of demand pattern that faces their products will have a better chance of staying on top of the changing trends. Utilizing current data and conducting analysis on the changing trends allows a company to identify the general demand pattern for their product. After understanding the type of pattern, it is essential to implement the concept of demand management. Demand management will allow a company to prepare for trends by changing the demand pattern using various techniques (Krajewski, Malhotra, &Pitzman, 2019). The coffee industry is heavily influenced by changing seasonal trends, and to stay ahead requires a business to understand the demands and finds ways to manage them successfully. It is essential that leaders in the coffee industry understand that trends canbe unpredictable at times. Changing patterns and demands can put pressure on a business, but by remaining agile, the operations have the opportunity to thrive (Baskerville, 2012). The current location will provide necessary data to prepare an analysis and recommendations for demand management for forecasting, inventory, and scheduling. Once a demand management plan is determined and implemented at the current location, we can then refine the model beforeopening the second location. Forecasting future demands, inventory needs, and staff schedulingis vital to an efficient operation and will increase our chances of creating a successful second location.
The Impact of Advertising on Product Demand
Advertising is essential to connecting the consumer to a brand or product, and it can be a significant driver of sales. Advertising creates value by engaging customers with the product,maximizes profits, and can lead to a firm having a competitive advantage in their industry(Yohn, 2019). Increasing the number of funds allocated to advertising will not necessarily generate more sales, and it is important that all the owners of Wild Dog Coffee Company understand this component. Effective advertising is targeting the right audience, building a reputable brand, and establishing value for the customers. While the advertising dollars are driving sales, there are ways to achieve effective marketing at a lower cost. Facebook and other social media platforms are crucial resources where ad campaigns can reach large audiences at a low price. By spending $20 a day on Facebook ads thousands of individuals can be reached, and these advertisements can be based on interest, demographic, location, age as well as several other categories. Having the ability to target individuals that are similar to the current customer base is a game changer, and can really grow a business (Tubis, 2018). However, if we come to a consensus that the current cost per month is appropriate, then it is vital to target correctly and
eliminate wasteful marketing techniques. There are several marketing tools at our disposal, and how we utilize them will impact our future sales at both locations.
Forecasting Techniques
Forecasts impact every part of an organization, and it is essential to identify the demand pattern that a product follows to ensure that inventory follows the changing trends. At Wild Dog Coffee Company, the demand pattern is seasonal, and this means that there are specific patterns that exist depending on the time of day, week, month, or season. The historical data provides insight into the seasonal changes, and will better prepare our coffee shop for future demands.The data in the table below was used to create the forecast model below for the pounds of espresso beans needed for month seven based on the advertising cost of $1,350.
Figure 1. Espresso Bean Use and AdvertisingDollars Per Month

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MBA5016 Operations Management for Leaders Efficient Operation Capella University

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