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Page 2

CASE 1 : Yankee Fork and Hoe Company 2:


In order to cope with the problem, Yankee Fork and Hoe should improve the lines of
communication between marketing and production department regarding the preparation of
forecasts. For example, previously, forecasting system preparation is based on only sales and
marketing department when they conduct the meeting, the production department should take part
in the meeting to provide relevant information about raw material on hand and production
schedule, plus making comment on what could be or could not be done for the anticipated demand.
Moreover, the meeting should conduct at the end of each month because monthly forecast for the
whole next year period is not enough; both departments should adjust the anticipated demand
monthly to avoid unexpected changes in the economy and shortage of the raw material.

 The Marketing division may not be optimistic. The problem of delayed delivery may come

from the Production itself (Low productivity).
It is viewed that the delay delivery problem was not caused by the too-optimistic monthly

forecast from Marketing Department but the low productivity of Production Department. Currently,
the final-assembly schedule relied on “adjusted forecast” that we could obviously see that the
current production is not sufficient to serve our customer order.

The production capacity seemed not to be a problem as rake head and bow could be
produced 7,000 and 5,000 units per day respectively, compared to the highest sales record in the
last 4 year (month 11 year 1) at 83,269 units.It seemed that the inappropriate inventory
management was the major factor causing the unproductive production.

In order to be able to deliver all customer order without any obstruction, the following ways
were suggested:

- To track and gather the real demand of Top 5 – Top 10 customer who were influential to
total company sales and set the minimum stock to at least be able to serve such customers
since the current excess demand might be occurred from one of this group.

- To negotiate and revise the raw material order with existing suppliers. The annual
committed volume method is recommended given that company could solve the fluctuated
demand problem and might get the higher discount from the high volume order. Also,
finding prospect suppliers could mitigate the supplier concentration risk.

Page 4

CASE 1 : Yankee Fork and Hoe Company 4:



Figure 2 : The Bow Rake’s Demand of Year 1 – 4


Since the annual trend have linear pattern, we can use Linear Trend Equation Technique to
forecast Year 5 volume as following.

From Linear Trend Equation;











We can get the number of Year 5 forecasting by formulating the linear equation. We can calculate
and by using the below formulas;





















Year (t) t

2
Demand (Ft) t·Ft


1 1 457,949 457,949


2 4 487,441 974,882


3 9 538,654 1,615,962


4 16 551,139 2,204,556

 10 30 2,035,183 5,253,349


2
100


Table 2 : The Linear Trend Equation Calculation



0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

1 2 3 4 5 6 7 8 9 10 11 12

D
e

m
a

n
d

(
P

ie
ce

)

Month

The Bow Rake's Demand of Year 1 - 4

Year 1

Year 2

Year 3

Year 4

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