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Weather sensitivity analysis: Case Study The company manufactures a range of horticultural
products and sells them through various distribution channels including
the major DIY outlets and garden centres. "With the help of Forecast Solutions we now understand the considerable efect that weather variation has on sales of our products. As a result we are better placed to interpret recent events and make the best possible forecast of future demand" Steve Harper, Sales Director, William Sinclair HorticultureHistorical weather data was sourced in the form of population weighted
national data for the UK. Statistical analysis was carried
out in order to examine the influence of weather variation on product
group sales. Integration of results with the sales forecasting systemNot only was it was established beyond doubt that that weather variations affected the company's sales, but it also proved possible to quantify the relationships for most product groups. Simple models were developed to explain the percentage change in sales caused by unit deviation from average seasonal weather patterns, with temperature, rainfall and sunshine hours featuring in the models. The results of the weather sensitivity analysis have been incorporated into the demand forecasting system to give a more effective interpretation of historical variances and an improvement in forecast accuracy. Careful use is also made of the short-term weather forecast in considering possible forecast outcomes. |