6 Reasons Why Demand Forecasting Is Important In International and National Businesses

Demand forecasting is a well researched topic, and the most methods used in today’s businesses are relatively new. Setting out goals on sales promotion in international or national business without having relevant knowledge is like jumping from a mountain without having a parachute in your hands. I often find that the first thing people ask me at a conference is the importance of demand forecasting for their companies. In this article I will point out 10 reasons why you need to consider it for your business.

1) Many businesses nowadays provide services and products to their clients without having a clear figure of their demand. Sometimes what they know about their consignments is the deadline they should meet, but missing a proper demand forecasting plan can lead them to not appropriately react to the changes. When a customer is unable to get the product or they want more than once, it can make them to choose the competitor’s product.

2) Marketing gurus of your company may not perfectly promote your sales in case you do now know how much is necessary to produce. If you company overestimates demand, it has a risk of producing too much which can lead you to loss due to holding unsold items. But if it produces too little, there will be a loss of potential profits and your marketing team can not help you in this case too.

3) With the growing tends of globalization and wide range of items in the market coming with different shapes and sizes it is also important to track the demand for each product. The demand for small audio sets, touch-screen audio sets, Bluetooth-enabled audio sets should be considered separately keeping in mind all customers needs.

4) In business battles, especially in international businesses the future prices and costs are not always stable. Demand forecasting should be tied with all profit margins considering the prices and the costs of your production.

5) Changes in technology have contributed towards globalization. The improvements of technology make our lives much more convenient therefore the rules of the game are changing. There should be forecasting about technological change (TC) and its bear upon demand, costs and prices.

6) Besides these all, demand forecasting should be based upon changes in the external environment. As we know a business doesn’t operate in a vacuum. It has to act and react to what happens outside the factory and office walls, and sometimes outside from national borders. With this in mind I want to close up with the 6th reason why it is fundamental for your company.

Contract – Terms of Business, Battle of the Forms and Letters of Intent

The buyer (a company that made control systems for vehicles) placed orders with the seller (a company that supplied pedal sensors). Both parties traded on their standard terms of business, the key difference between the two being, as it is usual to expect, the extent of the liability, if something went wrong under the contract. The buyer’s conditions sought to impose unlimited liability on the seller for certain breaches, while the seller’s conditions purported to exclude any liability for consequential loss or damage and restricted its business liability to repair.

The sensors were defective resulting in serious problems, including uncontrolled deceleration and loss of power. The buyer suffered substantial losses as a result, including the cost of inspections and replacement of parts. It sought to argue that the contract was formed on its business terms and sought to recover its losses from the seller. The seller argued that the contract was formed on its terms and that its liability was limited to repair, in accordance with its standard terms, which the buyer had accepted by taking delivery of the sensors; while the buyer argued that the seller’s liability was unlimited (in accordance with its standard terms).

So, the preliminary question before the Court was on which terms the contract between the parties was formed.

In an unexpected decision, the Court decided that, the contract did not include either set of standard terms, because the parties had not reached agreement on their precise wording and there was no conduct that could be interpreted as accepting the other’s terms. The Court, therefore, held that the contract terms were governed by the Sale of Goods Act.

The Court, in giving its decision, summarized some of the key principles from previous cases, where there was a “battle of the forms”:

• The contract must be read objectively;

• In most cases, a contract is formed once the last set of terms is sent and received, without the recipient objecting;

• One party can be found to have accepted the other party’s terms by its conduct, but such conduct must be clear (looking at it objectively) with the intention to accept those terms; simply taking physical delivery of the goods is not enough;

• Where parties have not agreed which set of standard terms applies, the only inference that can be drawn is that, the contract was made on the basis that neither set would apply.

In conclusion, terms must be agreed between the parties before the contract is signed or executed. Even expressed wording in contract terms stating that the standard terms will prevail over others may not be effective where it can be shown that no agreement was reached, whether expressly or by way of conduct.

Another recent decision of the Supreme Court addresses two key points. The first is the need to have agreed contract terms, before work starts under a contract and the second that, where a letter of intent is signed and work starts due to it, that a contract must be finalized as soon as possible after that. In this case, the parties entered into a contract formed by a letter of intent. When the letter of intent expired the work continued on, before the terms of the detailed written contract had been finalized.

The Court in its decision reiterated that in terms of letters of intent, it will not impose binding contracts where none existed and therefore each case will depend on its own facts, taking into consideration what is communicated between the parties by words or conduct. Where contracts are negotiated “subject to contract”, the Court noted that, it will not always infer that a contract has been agreed on those business terms that are “subject to contract”.

However, in this case, the Court decided that the parties had agreed a binding contract and that the binding contract was not subject to contract for the following reasons:

• Given the parties agreement over price, it was unrealistic to infer that the parties did not intend to create legal relations;

• All the essential terms had been agreed and variations were agreed without stating that they were “subject to contract”. The actions and communications of the parties indicated that they had accepted the contract terms and formed a legal contract, without the necessity to require a formal written contract; and

• The parties had negotiated in detail the clauses which comprised the terms as amended and as such the clauses had been essentially agreed and varied.

This case highlights the dangers inherent in starting work before a formal written contract is in place and such letters of intent should always be treated with caution.

However, if a letter of intent is inevitable, this should:

• Clearly specify those contract terms that have been agreed and those that remain outstanding, so that there is no uncertainty over what has or has not been agreed between the parties; and

• State that, no binding contract is to come into effect, except to the extent set out in the letter and that neither the letter nor any work done or payment made under the letter shall be deemed to be a waiver of the requirement to provide a binding contract.

Finally, every effort should be made to finalise the contract as soon as reasonably practicable after the letter of intent has been signed.

This article is for general purposes and guidance only and does not constitute legal or professional advice.

Copyright 2010 Anassutzi & Co Limited. All rights reserved. Information may be shared or reproduced only if accompanied by the author’s name and bio.

Obstacles You Need to Surpass on Your Online Home Business Journey

We all know the power and capabilities of Internet when it comes with money making. If not, you are far away left behind my friend. Making money online 5 to 10 years ago is entirely different today. Internet technology really moves very fast and we have to go along with this trend for us to become successful on this Industry.

The Internet presents a huge goldmine just simply waiting for the right person to come along and dig into it. However, there are some obstacles or bad news about online home business. You have to understand that it is not as easy as it sounds to set up and build successful online business. There are several obstacles or bad news that you need to pass through and below are some of them.

Time – You have to provide a profitable time for you to build your online business. Ensure that the time you spend is a profitable one for your business. Since you are aiming with online business, you have to be in front of your computer doing something that will help your business to grow. It is not necessary to spend more than eight hours in front of your computer. Two to three hours per day will do. As long as it is business related and again, it is a profitable time.

An example of profitable time is an hour per day trying to educate your self. It is not advisable to go to online business battle field without any battle suit and sword. Your education will serve as your weapon as you travel your online success. Read some free eBooks available online. Although, there are some cases that you need to cash out extra bucks for you to receive a good information or knowledge but rest assured that it is worth it.

Information Over Load – This is one of the common bad things about online business especially for beginners and I was on the same boat before. It seems that I want to try everything I read, heard and watched. I want to apply all the techniques that will help me to become successful online without realizing that some of the information available around the net will not work for me or for my business. It is advisable to look for a mentor who is honest enough to tell you what will work and will not work for you. Stay with a single procedure or steps and during your online journey, you will notice that you need to change or modify your strategy. You will learn everything when you are already doing the business.

Budget – Online business is not Get Rich Quick Schemes. Yes, I know that you already found several advertisements that say “Earn $1000 on your first day” or something like that. But believe me; it will take some time, effort and money for you to reach what you really desire. Actually, you need a budget just to educate your self for you to do the business in the right way and market it. You need money to gain additional skill set needed for your business and market it.

Skills – Since we are talking with online business, you really need to have same basic Internet skills. Yes, you read it right, just basic skills. As long as you now how to turn on/off your computer, move your mouse, read emails, navigate a website and etc, you will be fine. But you have to educate your self since Internet is really a fast environment. There’s no need to have a programming or web designing degree. Personally, I don’t have any experience when it comes with web designing and web publishing. I just learned it from a free eBook online. This is a good example of profitable time. Reading free eBooks on how to create a simple website during my free time.

When I was a beginner, I don’t have the skill set needed to run any online business. All I know is how to open/close my computer, surf the net, navigate a website using the mouse, check and read emails and other basic skills about computer. You now what I did? I search online for a free eBooks that can help me to market and run my online home business. I found several free eBooks that I still use until now. This includes an eBooks on how to create a wed site, eBooks that teach me on how to use specific video editing applications and many others. I keep on searching for additional information that I can use to boost or improve my skill sets. Eagerness to learn is my only weapon when I am just a newbie on this online home business battle field. Eagerness to learn serves us my sword to survive on this battle field.

There are still several bad things that you can still encounter as you travel your online journey. What I just provided above are some major bad news or problems. But let’s put it this way; do not consider them as bad things. Picture them in a positive way. Consider them as challenges and along the way, they will help you towards online success.

Once you manage the bad news or obstacle, you will surely experience the financial freedom! Every one of us wants financial freedom right? This is the main reason why you want to put up an online home business. If you set up your business the proper way and turn the bad news into positive one, I’m 100 percent certain that you can also achieve what they called financial freedom using the power of Internet.