Yankee Case
Business Brief
Yankee Fork and Hoe Company produces garden tools and is the leader in this very competitive and mature industry. A large increase in sales is not likely in the industry so providing outstanding customer service for a high quality product is key to surviving in this industry. Lately, very important and valuable customers are receiving shipments late. This is a huge problem because these customers guarantee on time delivery to their customers. To look closer into the issue, I discussed the ordering process with the marketing and production manager. These two managers described how they forecast and it is clear there are a number of issues with each of their methods. Due to the inaccurate forecasting methods, orders are not being placed correctly which leads to tools not being available to meet the customers demand.
Analysis of the Current Forecasting Methods
The forecasting method Yankee Company utilizes is inaccurate and has numerous flaws. The production team and the marketing team are not communicating with each other and they are not utilizing the same forecasting method. The marketing manager, Ron Adams, who provides pertinent information to the production team, is not creating forecasts far into the future. Ron is only pulling forecasts one month away instead of next year, the year after and so on. Therefore the production manager, Phil Stanton is having trouble ordering the correct amount of inventory. To compensate for Ron’s poor forecasting, Phil is deflating all forecasts by 10%. Phil believes the machines cannot handle the amount Ron forecasts and the cost of holding steel is expensive. Neither of these managers are utilizing a quantitative forecasting method. In order to better manage the warehouse, a quantitative forecasting method needs to be implemented.
Seasonal Index Forecasting Method
The current forecasting method in place is not working. Therefore to effectively meet the demand, Yankee Company needs to implement the season
Yankee Fork and Hoe Company produces garden tools and is the leader in this very competitive and mature industry. A large increase in sales is not likely in the industry so providing outstanding customer service for a high quality product is key to surviving in this industry. Lately, very important and valuable customers are receiving shipments late. This is a huge problem because these customers guarantee on time delivery to their customers. To look closer into the issue, I discussed the ordering process with the marketing and production manager. These two managers described how they forecast and it is clear there are a number of issues with each of their methods. Due to the inaccurate forecasting methods, orders are not being placed correctly which leads to tools not being available to meet the customers demand.
Analysis of the Current Forecasting Methods
The forecasting method Yankee Company utilizes is inaccurate and has numerous flaws. The production team and the marketing team are not communicating with each other and they are not utilizing the same forecasting method. The marketing manager, Ron Adams, who provides pertinent information to the production team, is not creating forecasts far into the future. Ron is only pulling forecasts one month away instead of next year, the year after and so on. Therefore the production manager, Phil Stanton is having trouble ordering the correct amount of inventory. To compensate for Ron’s poor forecasting, Phil is deflating all forecasts by 10%. Phil believes the machines cannot handle the amount Ron forecasts and the cost of holding steel is expensive. Neither of these managers are utilizing a quantitative forecasting method. In order to better manage the warehouse, a quantitative forecasting method needs to be implemented.
Seasonal Index Forecasting Method
The current forecasting method in place is not working. Therefore to effectively meet the demand, Yankee Company needs to implement the season