The partnership between an Original Equipment Manufacturer and Direct Client. The business case of De Longhi Appliances and Nespresso with a focus on forecasting accuracy.

Abstract

The thesis examines a forecast analysis and its implications on production planning. In particular, concerning a company producing small domestic appliances, the focus is on the forecast of high quality coffee machines for a direct client. The forecast for each SKU is split into each market of distribution and there are mainly two types of forecast: the one produced by the company itself for the markets it serves using both the brands' recognition, and the one produced by the client for its exclusive markets. The accuracy of the forecast has important implications on the production process and on the satisfaction of the final customer's demand. With a precise forecast there are fewer risks to be out of stock and as a consequence, the demand is more likely to be satisfied. It will be discussed the forecast accuracy with the related markets' consideration, the company service level and the conclusions.