Google Forecasting Techniques Assignment Help Introduction: Forecasting techniques are important tools to establish the future expectations for the organization with the help of past analysis. These techniques make assumptions for their future predictions to determine the fundamental factors. These techniques also need a structure of budget that is prepared by the organization. For this paper, Google is selected as a company to determine its forecasting techniques, way of preparing budgets and MRP concepts that it uses.
Forecasting Techniques of Google: As per assignment help experts, Google uses several forecasting techniques to estimate its future sales and to reduce the risk. At the same time, a quantitative method uses a forecasting method by Google Incorporation. This method is also important for the company to predict data that may be in future by using past data. The quantitative method includes the numeric data of past performance such as sales numbers, web traffic numbers, Earning per Share etc (Anderson, et. Al 2012). This method can be divided into two parts that are explanatory and time series method. Google uses the time series method to observe the particular variables that are gathered from a certain time period. With this method, it forecasts about exchange rates, mean temperature and daily stock price. There are some other variables of time series methods such as monthly sales, money supply, production, stock level, periodical GDP etc.
For example, Google has been forecasted that it will attain 5.58% growth in the next quarter that is October 2012 and 18.18% annually (CNN Money, 2012). This forecasting is based on the current quarter data of Earning per Share and sales. This is quite an effective method for Google to predict the future performance by considering historical data. In addition, explanatory forecasting method also uses by Google to clarify about the market trends and to predict about the future market direction. There are various types of market trends that are considered to forecast such as customer confidence index, customers spending reports etc. With the help of this method, Google identifies that why these trends take place in the marketing activity (Brocklebank & Dickey, 2003). This method is quite different from the time series because time series method defines only about the future trends.
Budgeting Process of Google: Budgeting process is quite an effective way to estimate the amount that is required to complete a project or any financial activity of the organization. There are several financial activities that need the budget for a proper financial planning. Google incorporation uses the following process to budget its financial plans that helps to reduce the risks and unnecessary expenses of the organization. This budget is made by the organization for a particular time period and to complete a specific task. The budgeting process starts with the strategic objectives of the organization (Shim, Siegel & Shim, 2011). With this process, Google set financial goals and objectives that are to achieve. The objectives are set on the basis of marketing plan, revenue plan, inventory plan and production plan. Budgeting can be used to make more profit and for policy development.
This is measured for yearly basis and expressed in quantity terms. At the same time, Google prepare the budget by gathering the knowledge of the project that is to be implemented. Budget allocates the resources for the project that reduces cost of the organization. It conducts both planning and budgeting together for maximizing the profit. The process includes the designing, scheduling and reporting the information for a specific task. It considers a proper format of the amount and the activities in which the amount is to be invested. The amount is fixed severalty for each activity of the Google (Peterson & Fabozzi, 2002). The budgeting process of Google is quite effective or the organization, because it has good and timely communication with its all the resources. Its budgeting programs include allocation of resources to coordinate the bottom line programs.
MRP Concepts of Google: There are some MRP concepts that can be seen in Google planning process. Martial Resource Planning (MRP) is used by Google to helps its production managers. It is a computer-based system that supports to schedule and places the orders of its products and services. Business planning is a concept of MRP that is used by Google for making the several types of plan for organizational development. Business planning is a long-range strategy that decides the objectives related to cost, revenues and profit of the organization (Brocklebank & Dickey, 2003). Along with this, sales forecast is another MRP concept that is also found in Google incorporation. This concept can be conducted in several ways such as qualitative methods, quantitative methods and combine. Sales forecast is affected by both internal as well as external factors of demands.
Google incorporation can use four components of demand like cyclical, random, seasonal, and trend (Carlberg, 2005). In addition, capacity planning is used by Google that is the process of analyzing the amount of capacity that is needed to provide its users. Google provides several types of Google tools to its user and determines that there is a need or not to provide more resources to its user. At the same time, resource requirement planning is useful MRP concept that is conducted on business plan level. Google also use RRP as a tool in order to acquire new facilities and to expand existing facilities. At the same time, it is also testing the feasibility of master schedule in term of capacity (Swamidass, 2000). In addition, to identify the long-term issues regarding the resource, the mangers of Google use resource requirement planning.
Conclusion: From the above discussion, it is concluded that Google is using several forecasting techniques in order to predict the future demand. Additionally, it is also concluded that, the company also uses effective budgeting process for the financial planning. At the same time, it is also analyzed that, in order to reduce potential problems and to increase the level of profit, company can also use MRP and RRP.
References:
Anderson, D.R., Sweeney, D.J., Williams, T.A., Camm, J.D. & Cochran, J.J. (2012) Quantitative Methods for Business. (12th ed.). USA: Cengage Learning.
Brocklebank, J.C. & Dickey, D.A. (2003). Sas for Forecasting Time Series. (2nd ed.). USA: SAS Institute. CNN Money. (2012). Google Inc (NASDAQ:GOOG): Stock Price Forecast. Retrieved from http://money.cnn.com/quote/forecast/forecast.html?symb=GOOG Shim, J.K., Siegel, J.G. & Shim, A.I. (2011). Budgeting Basics and Beyond. (4th ed.). John Wiley & Sons. Peterson, P.P. & Fabozzi, F.J. (2002). Capital Budgeting: Theory and Practice. USA: John Wiley & Sons.
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