BM1913

Names _______________________________________________ Section ______Date____________

ACTIVITY
FedEx
FedEx, previously known as Federal Express, is a major player in the package delivery market and a direct
competitor to global leader United Parcel Service (UPS). The company was founded by Fred Smith in 1971.
After 40 years, the company has the world's largest airline in terms of freight tons flown and is the world's
fourth-largest in terms of fleet size. The company has almost 300,000 employees and sales revenue in
excess of $40 billion or two trillion pesos (Murray, 2019). FedEx’s service covered all around the globe,
making services available for customers from many countries and almost every place. FedEx has great air
network, having more than 320 daily international flights and 654 aircraft ready to ship the packages.
FedEx has many hubs around the world working as a midpoint for delivering the packages. There are four
(4) hubs in the Asia Pacific, that is, Shanghai, Osaka, Seoul, and Guang Zhou. Besides, FedEx has hubs in
London, Cologne, Frankfurt, and Paris, which will later ship the parcel around the European area.
Moreover, hubs that link Latin America, the Caribbean, and Canada were in Memphis and Miami.

Regardless of the company size, FedEx is not exempted from the volatile condition of different markets
and industries. This is the reason why the company considers external factors in assessing market
conditions. The results of this anlaysis are then used for the company’s capacity planning and labor staffing
requirements. Analysts at industry level look for causal factors that explain changes in demand for a given
set of products or services. The economic and social variables such as retail sales, wholesale inventory,
unemployment rates, and oil prices among others are also assessed on a local, national, and even
international level. For instance, e-commerce sales increased by about 102% from 2012 - 2014, whereas
during that same period the number of online stores went up by 1,354 percent (Xia, 2016). Through this
information, FedEx predicts the potential demand for their logistical services. In addition, FedEx also
considers months with higher demand, such as holiday seasons, when planning their logistics capacity and
design. All these enable FedEx to formulate accurate forecasts and create wiser decisions in terms of
capacity planning and overall operational design.

Answer the following items: (4 items x 10 points)

1. Identify the demand drivers present in the case study.
2. Analyze and describe the forecasting model/s being used by FedEx.
3. Determine the forecasting need/s of FedEx.
4. Recommend ways for FedEx to achieve accurate predictions of their forecasting need/s using the
steps of demand forecasting.

Rubric for grading:

CRITERIA PERFORMANCE INDICATORS POINTS
Content Provided pieces of evidence, supporting
8
details, and factual scenarios
Grammar Used correct grammar, punctuation, spelling,
1
and capitalization
Organization Expressed the points in clear and logical
1
of ideas arrangement of ideas in the paragraph
TOTAL 10
References:
Murray, M. (2019). The history of FedEx. Retrieved September 5, 2019, from https://www.thebalancesmb.com/federal-express-
fedex-2221098
Xia, Y. (2016). How FedEx uses macroeconomic data to forecast demand. Retrieved September 5, 2019, from https://demand-
planning.com/2016/04/06/how-fedex-uses-macroeconomic-data-to-forecast-demand

04 Activity 2 *Property of STI

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