The problem we are tackling here is “Design Compensation Incentives Based on performance of the Store Managers”. We can take the store sales as a proxy to indicate the performance of the manager. The model can be used to set sales target to their respective store managers. The variable payout is dependent on the manager’s ability to exceed the target.
Our client, The Australian Airports Association, appointed us for forecasting the passenger and freight traffic for the month of September 2019. Based on our forecast they intend to take the decision of whether to go ahead with investing a budgeted $1.2 Billion on building new infrastructure (including runways, facilities) and recruiting staff. As per their own business estimates, they have set a threshold of a 40% increase in their YoY traffic for both passenger and freight data to decide for a go/no go on the Investment.
Bad inventory planning can have a negative impact leading to loss of sales at the retailer end (understocking) or an inventory build-up across the chain (overstocking). This can result in potential losses to all stakeholders in the chain. Forecasting can help demand planners of retail chains make better decisions regarding the right quantity of products to stock on retail shelves.
Prof. Galit Shmueli, Institute of Service Science, College of Technology Management, National Tsing Hua University, 101 Kuang Fu Road Sec. 2, Hsinchu 30013 Taiwan
