Question

Identify the members of the supply chain who are affected by a high forecast. (Check all that apply.) Multiple select question. The firms that own the supply chain incur the expenses of high forecasting. The operations managers pay for the costs incurred due to high forecasting. The workers pay for the costs incurred due to high forecasting. The customers pay for it in the form of higher prices.

Answer 1

The supply chain members affected by a high forecast include firms that own the supply chain, operations managers, and customers. Workers do not directly pay for the costs incurred due to high forecasting. The ability of businesses to pass these costs on to consumers is largely dependent on the price elasticity of demand.

Step-by-step explanation:

Members of the supply chain affected by a high forecast include several key actors. Primarily, the firms that own the supply chain do incur the expenses related to high forecasting as they need to plan production, logistics, and inventory management around these forecasts. Operations managers within these firms also face the direct impact of high forecasting, often dealing with adjustments in operations, capacity utilization, and cost management.

However, it is not typical for workers to pay for the costs incurred due to high forecasting directly, as their salaries and wages are generally not linked to forecasting expenses. Finally, the customers may end up paying for high forecast costs in the form of higher prices. This happens when a business decides to pass on increased production costs to consumers, which is influenced by factors such as the price elasticity of demand.

It's important to note that the ability of a business to pass on these costs depends on market conditions and the price sensitivity of its customers. If demand for the product is inelastic, the company may succeed in transferring the full brunt of the costs onto the customers. On the other hand, if demand is elastic, the firm might have to absorb the costs to maintain its market share.

Answer 2

The question would be written again below with options attached this time, so as to aid understanding.

Identify the members of the supply chain who are affected by a high forecast. (Check all that apply.) Multiple select question. A. The firms that own the supply chain incur the expenses of high forecasting. B. The operations managers pay for the costs incurred due to high forecasting. C. The workers pay for the costs incurred due to high forecasting. D. The customers pay for it in the form of higher prices.

The Correct Answer is: Option A (The firms that own the supply chain incur the expenses of high forecasting), and Option D (The customers pay for it in the form of higher prices).

Explanation:

Forecasting is a key process that helps companies, firms make financial and operational decisions through the act of predicting demand, supply of a market. Forecasting helps the firm plan for future price and price fluctuations, and it also helps firms make enough research on the right supply of goods that would be necessary to satisfy demand.

The customers, from the answer selected, are key members of the supply chain as their tastes, opinions, affect the supplier decisions. High forecast makes the customers pay for it in the form of higher prices.

The firms that own the supply chain incur the expenses of a high forecast. Firms use forecasting to help them develop business strategies. Firms make adequate research on how high forecast affects other members of the supply chain.