CHAPTER NINE

Knowing all that, Jaya's dilemma was based on looking at the annual sales demand forecast developed by marketing for the V$27$ gear family of $16,000$ gears. When she got that forecast for $16,000,$ she looked at the sales for the V$27$ over the last $10$ years:

Ten years ago$-9733$

Nine years ago$-10,115$

Eight years ago $-9814$

Seven years ago$-10,033$

Six years ago $-10,077$

Five years ago $-9782$

Four years ago $-10,145$

Three years ago $-10,097$

Two years ago$-9924$

Last year $-9897$

Jaya decided to call the director of sales and marketing $($Phil Johnson$)$ and ask about the forecast. This is how the conversation went:

JAYA : "I wanted to ask about the demand forecast for the V$27$ gear line. You said it was $16,000.$ How did you come up with that number?"

PHIL: "Because that is what we plan to sell."

JAYA: $"$Do you have or expect to have any new customers for the V$27$ line?"

PHIL: $"$No$."$

JAYA: $"$Do any of your customers have any new applications that use the V$27$ gears?"

PHIL: "Not that I know of$."$

JAYA: $"$Do any of your customers have or expect to have new customers for their products that use our V$27$ gears?"

PHIL: "Not that I know of$."$

JAYA: "Are any of your customers experiencing growth in their products that use V$27$ gears?"

PHIL: "Not that I know of$."$

JAYA: "Well then why do you think you will sell $16,000."$

PHIL: "Because that is what we plan to sell$-$and you hadn't better disappoint any of our customers or be late with any of their orders!"

Jaya hung up the phone and seriously wondered what she was to do$.$ If she ended up with too much inventory or disappointed any customers, she knew the general manager would blame her. She knew it could be a big mistake to try to put the blame back on the director of sales and marketing because not only was the director of sales and marketing at a higher level in the company, but he was also a personal friend of the general manager. Jaya knew they often played golf together on weekends and that their families frequently attended social events together.

Assignment

Try to help Jaya out with a short$-$term solution. Help him come up with how much steel to buy $-$ enough to cover production of how many V$27$ gears over the next year? After you come up with a number, justify your solution. Be as comprehensive as possible in the justification$-$include all possible options, diseussing why you reject those you reject and why you accepted your recommendation.

Develop a recommendation for Jaya and the Hatcher Gear Company to use in the long run, specifically to try to minimize the current dilemma from occurring again.