Sales and Operations Planning, economics homework help

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
 
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