The Materials Planning Committee for Advanced Technology Corp., a global manufacturer of precision metal parts for medical analytical devices, is holding its weekly planning and control meeting on Monday at 8 A.M. in the quality control conference room.

Sandy, the Chief Production Scheduler; Tim, the Inventory Manager; Dick Jones, the senior buyer; and Joe, one of their key suppliers, are meeting to discuss some recent late shipment problems. Joe leads off with, “The reason we are often late shipping you part 707A is that we are constantly receiving change orders, which louses up our MRP system.” Sandy says, “Joe, I know you are right, as I have a problem getting an accurate sales forecast from the marketing guys.” Tim interrupts with, “You think your MRP program is inaccurate? You should check our on-hand inventory status reports with your shipping records on part 707A; they seldom match.” All three agree that both organizations are at fault.

1. How critical is the sales forecast in this situation? How does this set of numbers affect MRP systems?

2. What are some reasons for changes in the sales forecast?

3. What factors might account for inaccurate inventory files?

4. What action steps and/or plans should these three managers take to solve this problem?

5. Is the concept of demand management relevant in this situation?