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:
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Purchasing: What should we buy and how much?
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Production: What should we really build?
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Inventory management: We keep building the wrong thing.
The sales manager asked you to write her a memo, specifically addressing the following:
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How could you suggest that your new system would achieve any better levels of forecast accuracy?
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Why is forecast accuracy itself not as important under traditional methods?
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Create a chart or timeline that includes all of the following:
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Which purchase orders have to be placed, and when
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When manufacturing needs to begin, to have products delivered to a customer
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Approximate dates for all of the following:
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When the product must be shipped to meet the customer’s due date
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When the application of the cover and packaging must take place to meet the customer’s due date
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When the manufacturing of the widget must begin and end
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When the raw material for the widget must be ordered
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When the plastic cover must be ordered
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When the cardboard box must be ordered
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Includes notes explain your timing calculation
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Assumes all of the following conditions:
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The factory has two departments: manufacturing and packaging
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Product X consists of 3 components
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a widget manufactured in the factory with a total manufacturing lead time of 1 week
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a plastic cover purchased from vendor A with a procurement lead time of 3 weeks
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a cardboard shipping box purchased from vendor B with a procurement lead time of 4 weeks
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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.
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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 3/31/2011
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Ignore any holidays
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Assume a 5-day work week
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The customer requires the product to arrive at his location on 3/31/2011
