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 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
a widget manufactured in the factory with a total manufacturing lead time of 1 week
a plastic cover purchased from vendor A with a procurement lead time of 3 weeks
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