In the retail world, there is a significant difference between steady-state and peak holiday demand. After reviewing the Demand Forecasting Graph presentation, analyze and explain the measures required to ensure customer satisfaction throughout the scenario below. In other words, where is the supply risk?

As you read the scenario below, keep in mind the service-level agreement to have a certain amount of product on the shelves. Think about when to order, how much to order, and the delivery time that would ensure that the product is available to the customer at the right time and when it is in demand.

Scenario This year, management has decided to offer a significant discount during peak season on current widget inventory due to the upcoming release of the new and improved Widget 2.0 arriving next year. Assuming each square on slide 2 of the Demand Forecasting Graph presentation (titled EOQ and Demand Adjustments) is equal to an economic order quantity, how and when would you recommend preparing for the estimated surge in demand for the sale? What other elements of the supply chain should be considered when preparing for this increase in demand?

Demand Forecasting Exercise for Summer Widgets Working Stock Seasonal Demand Average Demand Safety Stock As you can see above, the Widgets Industry has seen a rolling demand cycle that peaks each summer and then again near the holiday season. While there is not much demand during the spring and fall, the seasonal demand has been consistent over the known history of Widget manufacturing. In the following slide, there are two scenarios that Widgets Inc. is preparing for, and requires your assistance in devising an inventory stock plan. EOQ and Demand Adjustments Boxes are the economic order quantity for the item from suppliers This ensures the most cost-efficient order for both price and delivery time Blue line is steady-state seasonal demand Red line indicates that a sale is planned just prior to peak season Yellow line is the fallout from poor publicity about the health hazards of the product, which are later debunked EO