The Cost Forecasting System is used for the budgeting process for Frito Lay Canada. It is used at every location in Canada, and the information is sent to the Head Office in Mississauga where it is rolled up into an overall budget for the country.

This system allows a budget for the entire year to be built up by generating forecasts for over 350 individual accounts for each location. Each account has a different algorithm for generating a forecast for it. During the annual budget process a forecast is generated for the year broken down into 13 periods of four weeks each.

Every period (four weeks) as the year progresses, the actual costs are imported into the Cost Forecasting System. The budget for the remainder of the year is then reviewed and forecasted again based on the actual costs that have occurred in the year so far.

Additional measures are integrated into the system to assist in the budgeting process such as cases handled, cubes handled, cases shipped, mileage, etc. These measures are used to provide useful information when comparing different time frames where the actual costs are tied to the measure. For example, the actual amount of product shipped is going to affect the account that tracks the costs for shipping. When more product is shipped, more hours are required to do the shipping. For this reason the budget dollar per case shipped gives a basis to compare the budget for one period to the next. If the number of cases shipped is expected to go up, then the cost will also go up, but the cost to ship one case should remain the same.

This database is equipped with extensive report functions to assisting in rolling up the budget to the other facilities and in turn, to the Head Office in Mississauga. There are additional tools for generating charts and other reports that are used mostly at Head Office.