Read the case study on Walt Disney and then answer the four questions based on the case study. Forecasting provides a Co

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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 world’s most respected global brands, Walt
Disney Parks & Resorts is a visible leader. Although the
monarch of this magic kingdom is no man but a mouse—Mickey
Mouse—it’s 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.
Disney’s 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 people—how 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 yesterday’s attendance at the parks (Magic
Kingdom, Epcot, Disney’s Animal Kingdom, Disney’s 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 doesn’t 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 Resort’s 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, Disney’s 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 company’s 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?