1. Comment on the forecasting system being used by Franklin Fan. Suggest changes or improvements that you believe justified.

2. Develop your own forecast for window fans for each month of the next year 2015. Justify your forecast and the method you used.

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Forecasting The only way for Franklin Fan to generate new sales and retain old customers is to provide superior customer service and produce a product with high customer value. This approach puts pressure on the manufacturing system, which has been having difficulties lately. Recently, Dan Block has been receiving calls from long-time customers, such as Sears and Home Depot, complaining about late shipments. These customers advertise promotions for fans and require on-time delivery. Block knows that losing customers like Sears and Home Depot would be disastrous. He decides to ask consultant Sharon Place to look into the matter and report to him and Ed Spriggs in one week. Block suggests that she focus on the window fan as a case-in-point because it is a high-volume product and has been a major source of customer complaints. In the mean-time, Sue McCaskey is working on modifications to the inventory management system that should also improve product availability. A window fan's main components consist of molded fan blades (5 per fan), a molded motor housing (I per fan), an electric motor (1 per fan), and various hardware items. Place decides to find out how Franklin Fan plans window fan production. She goes straight to Phil Stanton, the Production Manager, and Joe Donnell, the Purchasing Manager, who give the following account: Planning is informal around here. To begin, marketing determines the forecast for window fans by month for the next year. They then pass it along to us. Quite frankly, the forecasts are usually inflated-must be their big egos over there. Joe Donnell mentions that he has to be careful because Franklin Fan enters into long- term purchasing agreements for plastic resins, and having it just sitting around is expensive. So Phil and I usually reduce the forecast by 10% or so. We then use the modified forecast to generate a monthly final-assembly schedule which determines what materials we need from suppliers and what products we need from the molding and assembly areas. The system works well if the forecasts are good. But when marketing comes to us and says they are behind on customer orders, as they often do near the end of the year, it wreaks havoc for the schedules. Molding gets hits the hardest. For example, the molding machines that mold the fan blades and motor housings from the plastic resin can only produce about 7,000 housings and 30,000 blades per day, and the assembly department can do only 5,000 fans per day. Both operations are also required for many other products. Forecasting The only way for Franklin Fan to generate new sales and retain old customers is to provide superior customer service and produce a product with high customer value. This approach puts pressure on the manufacturing system, which has been having difficulties lately. Recently, Dan Block has been receiving calls from long-time customers, such as Sears and Home Depot, complaining about late shipments. These customers advertise promotions for fans and require on-time delivery. Block knows that losing customers like Sears and Home Depot would be disastrous. He decides to ask consultant Sharon Place to look into the matter and report to him and Ed Spriggs in one week. Block suggests that she focus on the window fan as a case-in-point because it is a high-volume product and has been a major source of customer complaints. In the mean-time, Sue McCaskey is working on modifications to the inventory management system that should also improve product availability. A window fan's main components consist of molded fan blades (5 per fan), a molded motor housing (I per fan), an electric motor (1 per fan), and various hardware items. Place decides to find out how Franklin Fan plans window fan production. She goes straight to Phil Stanton, the Production Manager, and Joe Donnell, the Purchasing Manager, who give the following account: Planning is informal around here. To begin, marketing determines the forecast for window fans by month for the next year. They then pass it along to us. Quite frankly, the forecasts are usually inflated-must be their big egos over there. Joe Donnell mentions that he has to be careful because Franklin Fan enters into long- term purchasing agreements for plastic resins, and having it just sitting around is expensive. So Phil and I usually reduce the forecast by 10% or so. We then use the modified forecast to generate a monthly final-assembly schedule which determines what materials we need from suppliers and what products we need from the molding and assembly areas. The system works well if the forecasts are good. But when marketing comes to us and says they are behind on customer orders, as they often do near the end of the year, it wreaks havoc for the schedules. Molding gets hits the hardest. For example, the molding machines that mold the fan blades and motor housings from the plastic resin can only produce about 7,000 housings and 30,000 blades per day, and the assembly department can do only 5,000 fans per day. Both operations are also required for many other products.

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2 The drawbacks of the forecasting system of Franklin Fan Company that can be improved are informal ... View the full answer