Moderating effect of forecasting methods between forecasting criteria and export sales forecasting effectiveness: an empirical model for UK organizations

Yenilmez-Dramali, Demet (2013) Moderating effect of forecasting methods between forecasting criteria and export sales forecasting effectiveness: an empirical model for UK organizations. (DBA thesis), Kingston University, .

Abstract

Over the last three decades important advances have been made in developing sales forecasting methods that more accurately reflect market place conditions. However, surveys of sales forecasting practice continue to report only marginal gains in sales forecasting effectiveness. This gap between theory and practice has been identified as a significant issue for sales forecasting research. The literature suggests that this gap should be addressed by examining new factors in sales forecasting. Accuracy, bias, timeliness, cost and environmental turbulence are the most studied forecasting criteria in sales forecasting effectiveness. There are some literatures which address how these factors are affected by the forecast methods the firm uses. Empirical evidence on such a role of the forecasting method is lacking, and existing literature does not take into account whether forecasting criteria's influence on export sales forecasting effectiveness vary depending on the forecasting methods used by the firm. This is the first research gap identified during the literature review. Furthermore, the role of export sales forecasting. effectiveness on export market performance have received only limited attention to date. Linking the forecasting effectiveness to the business performance was reported to be critical in evaluating and improving the firm's sales forecasting capability and sales forecasting climate. However, empirical evidence of this linkage is missing and this is the second gap this study addresses. A conceptual model is proposed and multivariate analysis technique is used to investigate the relationship between dependent (forecasting effectiveness and export performance) and independent variables (forecasting criteria, forecasting methods, managerial characteristics, organizational characteristics and export market orientation). Our finding revealed the impact of bias, timeliness and cost on forecasting effectiveness varies depending on the forecasting methods used by the firm. But no moderating impact of forecasting methods has been found for accuracy and environmental turbulence. Moreover, this study reported the linkage between forecasting effectiveness and export performance when composite forecasting method is used. Identifying the relative importance of all the factors (i.e. accuracy, bias, cost, timeliness, forecasting methods, etc) it becomes possible to set priorities directly reflecting managerial preferences for different forecast criteria. If implementation of such priorities is seen to contradict principles of good forecasting practice, action can be taken to inform managers of the potential negative consequences.

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