Posted: April 18th, 2016
The forecasting department, traditionally reporting to the sale manager, has historically seen a forecast accuracy of about 60%, and this in turn causes problems for the following departments:
Purchasing: What should we buy and how much?
Production: What should we really build?
Inventory management: We keep building the wrong thing.
The sales manager asked you to write her a memo, specifically addressing the following:
– How could you suggest that your new system would achieve any better levels of forecast accuracy?
– Why is forecast accuracy itself not as important under traditional methods?
– Create a chart or timeline(chart/time line (1 document)) that includes all of the following:
– Which purchase orders have to be placed, and when
– When manufacturing needs to begin, to have products delivered to a customer
– Approximate dates for all of the following:
– When the product must be shipped to meet the customer’s due date
– When the application of the cover and packaging must take place to meet the customer’s due date
– When the manufacturing of the widget must begin and end
– When the raw material for the widget must be ordered
– When the plastic cover must be ordered
– When the cardboard box must be ordered
– Includes notes explain your timing calculation
– Assumes all of the following conditions:
-> The factory has two departments: manufacturing and packaging
-> Product X consists of 3 components
1) a widget manufactured in the factory with a total manufacturing lead time of 1 week
2) a plastic cover purchased from vendor A with a procurement lead time of 3 weeks
3) a cardboard shipping box purchased from vendor B with a procurement lead time of 4 weeks
->The widget itself is made from steel (whose lead time from vendor C is 4 weeks).
-> It takes 1 day for the cover to be applied to the product and for the product to be inserted in the box in the packaging department.
-> The shipping time to this customer is in 3 weeks, and you do not want it to be late or early.
Assume you received the customer order on 1/1/20XX.
– Ignore any holidays
– Assume a 5-day work week
– The customer requires the product to arrive at his location on 3/31/2011
Place an order in 3 easy steps. Takes less than 5 mins.