Read the case study on Walt Disney and then answer the four questions based on the case study.

Forecasting provides a Competitive advantage for Disney

When it comes to the worlds most respected global brands, Walt Disney Parks & Resorts is a visible leader. Although the

monarch of this magic kingdom is no man but a mouseMickey Mouseits CEO Robert Iger who daily manages the

entertainment giant.

Mickey and Minnie Mouse provide the public image of Disney to the world. Forecasts drive the work schedules of 72,000

cast members working at Walt Disney World Resort near Orlando.

Disneys global portfolio includes Shanghai Disney (2016), Hong Kong Disneyland (2005), Disneyland Paris (1992), and

Tokyo Disneyland (1983). But it is Walt Disney World Resort in Florida and Disneyland Resort in California that drive profits

in this $55 billion corporation, which is ranked in the top 100 in both the Fortune 500 and Financial Times Global 500.

Revenues at Disney are all about peoplehow many visit the parks and how they spend money while there. When Iger

receives a daily report from his four theme parks and two water parks near Orlando, the report contains only two numbers:

the forecast of yesterdays attendance at the parks (Magic Kingdom, Epcot, Disneys Animal Kingdom, Disneys Hollywood

Studios, Typhoon Lagoon, and Blizzard Beach) and the actual attendance. An error close to zero is expected. Iger takes his

forecasts very seriously. The forecasting team at Walt Disney World Resort doesnt just do a daily prediction, however, and

Iger is not its only customer. The team also provides daily, weekly, monthly, annual, and 5-year forecasts to the labour

management, maintenance, operations, finance, and park scheduling departments.

With 20% of Walt Disney World Resorts customers coming from outside the United States, its economic model includes

such variables as gross domestic product (GDP), cross-exchange rates, and arrivals into the U.S. Disney also uses 35

analysts and 70 field people to survey 1 million people each year. The surveys, administered to guests at the parks and its

20 hotels, to employees, and to travel industry professionals, examine future travel plans and experiences at the parks.

This helps forecast not only attendance but also behaviour at each ride (e.g., how long people will wait, how many times

they will ride). Inputs to the monthly forecasting model include airline specials, speeches by the chair of the Federal

Reserve, and Wall Street trends. Disney even monitors 3,000 school districts inside and outside the U.S. for

holiday/vacation schedules. With this approach, Disneys 5-year attendance forecast yields just a 5% error on average. Its

annual forecasts have a 0% to 3% error. Attendance forecasts for the parks drive a whole slew of management decisions.

For example, capacity on any day can be increased by opening at 8 a.m. instead of the usual 9 a.m., by opening more

shows or rides, by adding more food/beverage carts (9 million hamburgers and 50 million Cokes are sold per year!), and by

bringing in more employees (called cast members). Cast members are scheduled in 15-minute intervals throughout the

parks for flexibility.

Demand can be managed by limiting the number of guests admitted to the parks, with the FastPass+ reservation system,

and by shifting crowds from rides to more street parades. At Disney, forecasting is a key driver in the companys success and competitive advantage.

Questtion 3

Forecasting in the service sector presents some unusual challenges. A major technique in the retail sector is tracking

demand by maintaining good short-term records. For instance, a barbershop catering to men expects peak flows on Fridays

and Saturdays. Indeed, most barber-shops are closed on Sunday and Monday, and many call in extra help on Friday and

Saturday. A downtown restaurant, on the other hand, may need to track conventions and holidays for effective short-term

forecasting. Provide recommendations on how Walt Disney might forecast for holidays and other not so productive days?