When there is a high demand for any product increase

when there is a high demand for any product , increase their sales and also have a
better customer service.
It seemed that Barilla’s customers were simply unwilling to give up their authority in
ordering and controlling their inventory.
Some were even reluctant to provide the detailed sales data upon which Barilla
could make delivery decisions and improve its demand forecasts. There is also
internal resistance from Barilla’s own sales and marketing organizations , they do
not believe in the proposal and see the concept infeasible and dangerous. They
think they are not ready to have the necessary relationship with distributors and it
is sophisticated for them now.
From 1989 to 1990 Barilla’s growth was 3.22% , it seems that the demand
fluctuation (Exhibit 12) has not a specific pattern. The demand swings and
distributors’ order pattern can have several reasons. One of the main reasons can
be the Barilla’s strategies in marketing, manufacturing and distribution. Poor
communication and customer service between distributors and retailers can be
another reason for this ordering pattern. Distribution centers are not equipped with
computer forecasting system , they just review their inventory levels in their
systems and order those products which are below the specified recorder level .The
retailers also are not equipped with bar code system and they use the traditional
system for checking their inventory and ordering the products. In this scenario the
distributors place an order when they receive and order so they have to builtexcess
capacity to hold goods which they guess may have more demands.
On the other side Barilla’s marketing strategies for increasing their sales, encourage
the distributors to buy some items more than they need and buy some in smaller
amounts. These marketing strategies which are called trade promotions are used to
push products into the grocery distribution network ,Barilla has 10 -12 “Canvass”
periods for their promotional programs. These are:
Transportation discounts (DCs want to reduce their transportation costs so they
may buy more than what they need so it effect the demand pattern)
Volume discounts and Promotional activities: It makes the DCs to order more than
what they need to reduce their costs, it affects Barilla’s and DC’s inventory levels
and demand pattern.

Lack of min/max volume constraints : means that DCs can order any product as
much as they need and it may make the Barilla’s stock empty what if they receive
more demands from other DCs?
Product proliferation: Barilla has 800 dry-product SKUs, but 100-150 of them are
mostly distributed by DCs, as the products have a huge variety so if they receive an
order for a product which has not a high demand they have to produce it what if
they receive a big order for a high demand product at the same time, this variety
affect demands fluctuation.