SECTION A $[40$ MARKS$]$

Read the scenario below and answer ALL questions in this section.

In $2022,$ a prominent South African retail chain, known for its vast network of supermarkets, faced

significant challenges due to incorrect forecasting during the holiday season. The company

overestimated demand for certain perishable goods, such as fruits and vegetables, expecting a surge in

consumer purchases. However, due to economic downturns and changes in consumer behaviour, actual

demand was much lower than anticipated. As a result, the retailer experienced high levels of waste,

increased costs in disposal and markdowns, and strained relationships with suppliers who had scaled up

production based on inaccurate forecasts. This misstep highlighted the critical role of accurate

forecasting in strategic operational planning, where the integration of real$-$time data and market analysis

could have mitigated losses. It also showcased how poor forecasting can disrupt supply chains, causing

inefficiencies in inventory management and eroding profitability.

QUESTION $1(20$ Marks$)$

Relating to the scenario above, examine the role of forecasting in strategic operational planning. How can

incorrect forecasting impact an organisation$$s operations and supply chain?