With year-end fast approaching, and some of the most dynamic market turns in the last 75 years at hand, annual budget forecasts are as difficult to create as they have ever been. Fortunately, there are tools and intelligence available to smooth out the bumps in what has been a very bumpy ride. While it’s always best to invest in sophisticated tools and analytics to produce the optimal forecast, here are some tips to muddle through if you don’t have those tools at hand.
- Bifurcate fixed price and spot buy purchases
- Establish a detailed, 3-5 year, history of purchases with allowances for new and obsolete sku’s
- Determine a realistic period for spot buy forecasts, short term (e.g. 90 day) may be the best possible scenario
- Investigate historical and market pricing trends for finished goods and feed stocks for use in predictive pricing
- Gather predictive data (e.g. “forward” contracts) on finished goods and feed stocks for use in predictive pricing