Demand Forecasting and Process Auditing-Nursing Paper Examples

Importance of Demand Forecasting and Process Auditing in Franchise Organizations

Demand forecasting constitutes historical data analysis procedures to formulate predictions about the demand for a product at a specific time (Balla-Elliott et al., 2020). It helps in making informed supply decisions, which is necessary for effective and efficient inventory management. Demand forecasting allows franchises to accurately plan their activities, making it easy to reduce unnecessary expenses (Demand Forecasting-Nursing Paper Examples).

Consequently, process auditing in inventory management refers to the procedures for examining the outcomes of inventory management activities to ascertain their alignment with the detailed processes (Handoko et al., 2020). An effective and efficient inventory management system should adequately achieve the intended objectives of the process. Thus, demand forecasting and process auditing are crucial aspects of the inventory management system that must be considered for the success of franchises.

Various researchers have explored the benefits of demand forecasting and process auditing in businesses. For instance, a study by Nasiri et al. (2023) focused on designing supply chain networks that incorporate strategic and operational decisions while ensuring enhanced network efficiency and cost reductions. It proposed a model to minimize lost demands and total network costs necessary to optimize strategic decisions, identify suitable warehouse locations, and implement appropriate decisions like vehicle routing to enhance positive outcomes.

The study results confirm the importance of demand forecasting for strengthening the proper management of inventories and reduction of the supply chain network risks. Another study by Sucic et al. (2019) proposed a systematic approach to enhance energy efficiency in industrial facilities. The activities involved in the approach include energy auditing, identification, and valorization of opportunities that can improve energy efficiency. The study findings suggest that applying the proposed approach enhances energy efficiency in organizations(Demand Forecasting-Nursing Paper Examples).

The last study was conducted by Wu et al. (2023), focusing on applying NAR neural networks to improve demand forecasting accuracy and facilitate informed decision-making based on accurate prediction of historical data. The study results indicate that the NAR neural network provides accurate results necessary for planning inventory in enterprises and facilitating the transformation of e-commerce industries into digital enterprises. However, the studies also depicted drawbacks like high costs of implementing demand forecasting and process auditing, which may not be feasible for some franchises (Demand Forecasting-Nursing Paper Examples).

Irrespective of the drawbacks, demand forecasting and process auditing remain crucial aspects that should be considered for effective inventory management. In this case, franchises can leverage the benefits to accurately predict and manage their operations. As a result, the paper will explore the benefits of demand forecasting and process auditing. Moreover, including the drawbacks of these crucial inventory management aspects. It will further examine the drawbacks of implementing demand forecasting and process auditing activities, discouraging some franchises from recommending their application. The last part will provide a rebuttal, affirming the need for franchises to adopt the two inventory management principles.

Claim

Franchises should consider demand forecasting and auditing to enhance their inventory management processes. Demand forecasting benefits franchises by improving their inventory management through the availability of real-time data (Wu et al., 2023). They utilize the data to accurately forecast product demand, making it easy to schedule supply and reduce warehouse overstocking. Overstocking attracts warehouse costs like maintenance and security, including the potential loss of product value (Demand Forecasting-Nursing Paper Examples).

Additionally, Seyedan and Mafakheri (2020) illustrate that demand forecasting allows the franchise to effectively schedule labor activities for unpredictable events like economic shutdowns and unexpected changes in consumer demands, reducing sales loss or costs associated with redundancies. Thus, franchisees should adopt demand forecasting to enhance their inventory management and scheduling of labor activities to optimize employee performance.

Moreover, demand forecasting optimizes production planning by enhancing the gathering and analysis of inventory data. More so, to ensure that products are produced or procured based on demand (Seyedan & Mafakheri, 2020). This approach reduces overstocking in warehouses, which attracts unnecessary costs to the franchise. Overstocking also locks the franchises’ capital, preventing them from investing in profitable business processes. Furthermore, Balla-Elliott et al. (2020) observe that demand forecasting can help the franchise improve its business strategy by projecting sales and allocating resources based on expected demand variation (Demand Forecasting-Nursing Paper Examples)s.

For example, the franchise can procure or produce more products to satisfy an expected increase in demand, outpricing its competitors and gaining a competitive advantage. It can also improve its business strategy by reducing risks and making informed financial decisions through demand forecasting (Seyedan & Mafakheri, 2020). Such an approach could expand the franchise’s profit margins by increasing and creating growth opportunities. Therefore, demand forecasting is ideal for optimizing production planning and improving the franchises’ business strategy (Demand Forecasting-Nursing Paper Examples).

Consequently, process auditing facilitates the establishment of strong internal controls for inventory management, like effective monitoring procedures. The internal controls enhance a franchise’s ability to identify and seal the gaps that may impede the efficiency and effectiveness of its inventory management processes (Handoko et al., 2020). Besides, it improves the efficiency of the inventory management system by identifying and eliminating redundancies that could be costly to the franchise (Handoko et al., 2020). It streamlines inbound and outbound logistics planning to ensure the alignment of the procedures involved in inventory management with the franchise’s objective of maximizing profits (Demand Forecasting-Nursing Paper Examples).

Moreover, it ensures the integrity of the inventory management process by reducing fraud and human error cases. Handoko et al. (2020) explain that process auditing identifies and recommends appropriate mechanisms for closing the loopholes. More so, that thieves could capitalize on and steal inventory, leading to losses in the franchise. Also, auditing can help identify risks associated with the inventory management process, such as faulty storage equipment in the warehouse. Such risks could affect the inventory, leading to considerable losses. Thus, process auditing improves integrity and identifies risks that could lead to inventory losses in the organization (Demand Forecasting-Nursing Paper Examples). 

Counterarguments

Some researchers believe demand forecasting and process auditing have drawbacks that could contribute to ineffective and inefficient inventory management. For instance, they believe demand forecasting is ineffective against unexpected events like an economic shutdown or sudden changes in consumer purchasing behavior leading to inventory losses (Nia et al., 2021) (Demand Forecasting-Nursing Paper Examples).

Also, its limitations to historical data indicate that demand forecasting can provide reliable predictions about demand, leading to ineffective inventory management (Nia et al., 2021). It makes it challenging for the franchise to forecast demand for a new product line, increasing the risk of losses when products are not sold as expected. Additionally, the organization must allocate additional resources to forecast product demand (Nasiri et al., 2023). Allocating resources for data analysis and market research cuts the franchise’s profits, especially when the results do not effectively improve the inventory management process(Demand Forecasting-Nursing Paper Examples).

Handoko et al. (2020) argue that process auditing in inventory management is also associated with higher costs for hiring the auditors and monitoring the results, forcing the franchise to seek additional finances, which may include cutting inventory expenses like warehouse costs, contributing to ineffective inventory management (Demand Forecasting-Nursing Paper Examples).

Additionally, the auditors may collude with the inventory management team through bribery and threaten to alter the final audit results (Agustina et al., 2021). Such practices could affect the inventory management process, increasing the overall losses at the franchise. Lastly, process auditing of the inventory management process may be inaccurate and produce unreliable results, especially if the auditors are inexperienced (Sucic et al., 2019). Such inaccuracy may create inconsistencies in inventory management, increasing losses at the franchise (Demand Forecasting-Nursing Paper Examples).

Rebuttal (Demand Forecasting-Nursing Paper Examples)

Based on the identified benefits and drawbacks of demand forecasting and process auditing, it should be noted that the two aspects are ideal for enhancing a franchise’s inventory management and overall profitability. The drawbacks of demand forecasting, like its ineffectiveness against unexpected events, can be mitigated by employing controls like insurance to cover inventory losses incurred by the franchise(Demand Forecasting-Nursing Paper Examples).

Additionally, fraud cases in process auditing can be reduced by enforcing a responsible organizational culture and implementing performance metrics software to enhance employee accountability (Agustina et al., 2021). Also, demand forecasting and process auditing can be expensive but highly rewarding through reducing resource wastage (Nia et al., 2021). Therefore, franchises should prioritize demand forecasting and auditing to align their inventory management processes with the constantly changing business environment (Demand Forecasting-Nursing Paper Examples). 

Conclusion

Franchises should consider implementing demand forecasting and process auditing to facilitate effective inventory management and profitability. The studies by Nasiri et al. (2023), Sucic et al. (2019), and Wu et al. (2023)extensively examined and confirmed the importance of demand forecasting and process auditing in various organizations. The benefits of demand forecasting include improved inventory management, appropriate scheduling of labor activities, optimized production planning, and improved business strategy (Demand Forecasting-Nursing Paper Examples).

On the other hand, process auditing enables franchises to establish strong internal controls, improving the franchise’s efficiency and integrity, including identifying risks in the inventory management process. Consequently, drawbacks associated with demand forecasting include ineffectiveness against unexpected events, limited historical data, and requires allocation of additional resources. Process auditing is also disadvantageous since it attracts high costs, is prone to fraud, and could produce inaccurate and unreliable results. Therefore, franchises should implement demand forecasting and process auditing to facilitate efficient inventory management and profitability (Demand Forecasting-Nursing Paper Examples).

References

Agustina, F., Nurkholis, N., & Rusydi, M. (2021). Auditors’ professional skepticism and fraud detection. International Journal of Research in Business and Social Science (2147-4478), 10(4), 275-287. https://doi.org/10.20525/ijrbs.v10i4.1214

Balla-Elliott, D., Cullen, Z. B., Glaeser, E. L., Luca, M., & Stanton, C. T. (2020). Business reopening decisions and demand forecasts during the COVID-19 pandemic (No. w27362). National Bureau of Economic Research.https://web.archive.org/web/20200626123457id_/https://www.nber.org/papers/w27362.pdf

Handoko, B. L., Mulyawan, A. N., Tanuwijaya, J., & Tanciady, F. (2020). Big data in auditing for the future of data-driven fraud detection. International Journal of Innovative Technology and Exploring Engineering, 9(3), 2902-2907. ISSN: 2278-3075

Nasiri, M. M., Mousavi, H., & Nosrati-Abarghooee, S. (2023). A green location-inventory-routing optimization model with simultaneous pickup and delivery under disruption risks. Decision Analytics Journal, 100161. https://doi.org/10.1016/j.dajour.2023.100161

Nia, A. R., Awasthi, A., & Bhuiyan, N. (2021). Industry 4.0 and demand forecasting of the energy supply chain: A literature review. Computers & Industrial Engineering, 154, 107128.https://doi.org/10.1016/j.cie.2021.107128

Seyedan, M., & Mafakheri, F. (2020). Predictive big data analytics for supply chain demand forecasting: methods, applications, and research opportunities. Journal of Big Data, 7(1), 1-22.https://doi.org/10.1186/s40537-020-00329-2

Sucic, B., Peckaj, M., Tomsic, Z., & Uranic, J. (2019). A systematic approach for improving energy efficiency in industrial facilities, from energy audit to practical implementation–case study production of autoclaved aerated concrete. In E3S Web of Conferences (Vol. 116, p. 00083). EDP Sciences. https://doi.org/10.1051/e3sconf/201911600083

Wu, P., Zhang, G., Li, Y., & Chen, X. (2023). Research on E-Commerce Inventory Demand Forecasting Based on NAR Neural Network. Open Access Library Journal, 10(5), 1-11.https://doi.org/10.4236/oalib.1110196