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Unformatted text preview: CASE 1 : Yankee Fork and Hoe Company 1: Question 1 : Comment on the forecasting system being used in Yankee. Suggest changes or improvements that you believe are justified. According to the case, there are several weakness of current forecasting system that are needed some adjustment, we would like to comment on the main problems and the way of improvement below. Using only Qualitative analysis, instead of Quantitative analysis. According to the marketing manager, Ron Adams explained on how he arrives at the forecast figures by meeting with managers from various sale regions to go over shipping data from last year. There was no mathematical technique explained in his calculation for the forecast. It seems that Adams has been using the Qualitative method rather than Quantitative method. In qualitative method, Adams could gain advantages of quick forecast and experiences from each manager. However there are some disadvantages such as group- think and since he’s meet ing with sale managers, the forecast tend to be overly inflated which related to Phil Stanton, production manager said that the forecasts are usually inflated and he usually reduce the forecast by 10 percent. Our suggestion is that a quantitative method should implement here. This method is suitable for the existing products that have stable demand and historical data are provided. According to demand from last four years, it tends to fall in seasonal pattern and there was not much changed in each year. Adams could use seasonality technique with the linear trend equation technique to calculate the future demand of year five. This method could provide more accuracy forecast regarding the different demand in each month. Using Actual Shipment figure, instead of Actual Demand figure The forecasting technique by used by the Marketing Department is based on actual shipment rather than on actual demand. Even though the Marketing Department tries to adjust for shortages in actual shipment data by meeting with various sales regions to go through the anticipated promotions and environmental and economical changes that brought about the shortages they has experienced last year, it is still reflecting past experience not for the future demand. The Marketing Department should focus on the past demand in order to project the future demand instead. The forecasting based on actual demand will help the Production Department schedule the production line more effectively. Also, the forecasting based on actual demand, instead of actual shipment will provide the Marketing Department more clear picture about the market situation. They can project more realistic volume and create more sales and revenue for the company when they anticipate the upward trend of demand. On the other hands, they can help preventing losses when anticipated downward trend of demand or unexpected changes in the...
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This note was uploaded on 12/12/2011 for the course SOT atge 3333 taught by Professor S during the Spring '11 term at University of Tunku Abdul Rahman.
- Spring '11