Annual Production Budgeting and Forecasting
A Major Fishing Company in New Zealand uses solutions built by Business Intelligence Technologies to budget their fish production. They fish for a wide variety of species and the quantity caught of each species is limited by an annual quota.
The fish is processed into products such as fillets or whole fish and sold into markets around the globe, often onto the tables of high-end restaurants within 48 hours of coming off of the boat. The quota is based on the weight of whole fish caught. Each fish product has a different yield and production cost. The yield is the ratio of the finished product to the weight of the whole fish.
The objective is to make the best allocation of the available quota and sell it as chilled product. In their model, the selling price of each product is in the currency of the destination market and the price has a seasonal variation. Product availability is also seasonal. The exchange rate fluctuation of each currency also has to be taken into account as does the shipping cost into each market.
Their model also calculates the budget and forecast financial results by planning the sales quantity of each product for each species by month into each market. This is multiplied by the price and the exchange rate for that market. The cost of the product is calculated from the projected catch cost, the yield for each product and the cost of processing.