Ong, Maxine Allain Z.

BSA 2-17 ASSESSMENT: CH 5

1. What is meant by supply chain management?

- Supply chain management basically means the handling of the entire production flow of
goods or service which can start from the raw components up all the way to the delivering
of its final products to the consumer. It comprised of businesses and individuals with great
contributions that involves the creation of product from raw materials to a finished
merchandise. It is the entire process by which the making and selling of commercial goods
include the supply of materials that were needed to be manufactured for the goods all
through their distribution and sale. It basically includes the supply planning, product
planning, demand planning, sales and operations planning, and supply management.

2. Why is profit margin is important?

- Profit margin is important because it shows how much money your business is making and
how much of every revenue is flowing to the bottom line which can improve the health of
your business and lessen the problems within. Profit margin generally reflects the long-
term profitability of the business and increase its fixed costs which can implement healthy
strategies. It is considered as a good indicator which would tell us how a company manages
its expenses and reveals the amount of revenue returned to a company once it has covered
virtually all its fixed and variable costs. It is a critical part whereas we should understand
it financial records for us to know what comes from the day-to-day work and how much
the overall sales the company keeps.

3. Is higher profit margin better? Why?

- A high profit margin literally means that the company can effectively control its costs and
can also provide goods and services that are significantly higher than its costs which can
result into a high ratio. It is generally better than low profit margin because of the fair state
that the only good profit margin is positive and increasing overtime. It is considered as one
 of the most important accounting measurements of an operational efficiency. It increases
the amount of profit made from the sale of a product.

4. How does forecasting helps a business?

- Forecasting allows businesses to set a reasonable and measurable goals that is based on the
current and historical data. Having an accurate data and statistics, it can help businesses
analyze what amount of change and growth will be determined as a success. It provides
relevant and reliable information about the past and present events because it gives
confidence to the managers for making important decisions. It also helps businesses to
make better business decisions that helps the overall business planning, budgeting, and risk
management. It also helps businesses to estimate their costs and revenue accurately based
on which they can predict the short- and long-term performance.

5. What is the importance of forecasting?

- The importance of forecasting is that it provides a relevant and reliable information from
past and present events which can become the basis for making planning premises.
Forecasting is valuable to business because it gives the ability to make informed business
decisions which can develop data-driven strategies and can provide efficient and effective
decisions based on current market conditions and predictions on how the future looks. It
provides cashflow panning, informed management decision making, support in raising
finance, save time and error reduction, and lastly, enhanced the performance monitoring
within the organization and the company.