Managing Forecasting And Inventory With Little Information: A Case Study

MaNagiNg FoRecaStiNg aND iNveNtoRy with LittLe iNFoRMatioN: a caSe StuDy by Robert J. Stawicki Discusses how to make a decision about purchasing and inventory with little information … often a large percentage of sales come from few products … products with excess inventory don’t require forecasts for immediate ordering. A A t times, a decision has to be made in business even when we don’t have all the information. This paper discusses one of those cases here. This is a situation where forecasts need improvement, but there is no time to work on them. The company has to make purchasing decisions to satisfy customer demand; otherwise, it runs the risk of being delisted. the buSiNeSS eNviRoNMeNt The company, the case in point, had hundreds of customers but most of the demand came from a few large accounts. Greater than 90% of the annual demand for all products from all customers was ordered within a narrow two-month window with approximately two months of lead time. All orders had to be completely filled or the company risked being permanently removed from the approved vendor list. Some small orders continued to trickle in during the rest of the year and those orders also had ...