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Dr Catt has a sales-forecast prescription for you

Dr Catt has a sales-forecast prescription for you

The first local graduate from a computing doctoral programme is helping businesses to use their forecasting software more effectively.

Peter Catt is a supply chain solutions manager at Soltius and received his Doctor of Computing degree at Unitec’s graduation ceremony in Auckland recently.

“It was a four-and-a-half-year process and I was working full-time throughout that period, but the programme is specifically for people who are employed,” he says.

Soltius is an implementer of SAP enterprise resource planning systems and Catt’s doctoral work looked at the use of these solutions in sale forecasting.

Catt has developed a new approach called the cost of forecast error metric that he claims is a better guide for businesses, not only in calculating forecast error, but in choosing the right IT solution in the first place.

Catt had his tutorial entitled ‘Assessing the cost of forecast error’ published in the US journal Foresight back in June.

“There has been more of an overseas response, as when it’s published there are a whole lot of academics who critique these things. I’ve done a reply to the half-dozen commentaries that is probably going to press in October in the same journal.

“Locally, we’ve had a lot of enquiries from the white papers we sent out. The practical application of it is to be able to go to a prospective client and look at their existing core accounting process and apply this model. We can identify a forecasting system that’s going to be most appropriate at less cost for them.”

He says a forecast is never right, it’s just a question of how close to right it is.

“You’ve got safety stock, which is a stock holding cost, but that safety stock gives you a buffer. So if your forecast is wrong then you don’t necessarily have stock outs. “Stock outs are a big cost because at that point you’ve missed a sale and you’ve probably alienated a customer at the same time. That’s the type of thing the model reveals. It’s certainly applicable to any company; we can say ‘apply this and look at the saving or additional revenue you can achieve’.”


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