Read Case Yankee Fork and Hoe Company on page 324 Answer questions 1 and 2, Make sure you calculate and include table of forecast in question 2.

Then, flowchart the forecasting process based on discovery notes from consultant by hand, visio, other or Arena Simulation Software.

CASE YANKEE FORK AND HOE COMPANY The Yankee Fork and Hoe Company is a leading producer Planning is informal around here. To begin, of garden tools ranging from wheelbarrows, mortar pans, marketing determines the forecast for bow rakes and hand trucks to shovels, rakes, and trowels. The tools by month for the next year. Then they pass it are sold in four different product lines ranging from the along to me. Quite frankly, the forecasts are usu- top-of-the-line Hercules products, which are rugged tools ally inflated-must be their big egos over there. for the toughest jobs, to the Garden Helper products, I have to be careful because we enter into long- which are economy tools for the occasional user. The mar- term purchasing agreements for steel, and having ket for garden tools is extremely competitive because of it just sitting around is expensive. So, I usually the simple design of the products and the large number of reduce the forecast by 10 percent or so. I use the competing producers. In addition, more people are using modified forecast to generate a monthly final- power tools, such as lawn edgers, hedge trimmers, and assembly schedule, which determines what I need thatchers, reducing demand for their manual counterparts. to have from the forging and woodworking These factors compel Yankee to maintain low prices while areas. The system works well if the forecasts are retaining high quality and dependable delivery. good. But when marketing comes to me and says Garden tools represent a mature industry. Unless new they are behind on customer orders, as they often manual products can be developed or there is a sudden do near the end of the year, it wreaks havoc with resurgence in home gardening, the prospects for large the schedules. Forging gets hit the hardest. For increases in sales are not bright. Keeping ahead of the example, the presses that stamp the rake heads competition is a constant battle. No one knows this better from blanks of steel can handle only 7,000 heads than Alan Roberts, president of Yankee. per day, and the bow rolling machine can do The types of tools sold today are, by and large, the same only 5,000 per day. Both operations are also ones sold 30 years ago. The only way to generate new sales required for many other products. and retain old customers is to provide superior customer service and produce a product with high customer value. Because the marketing department provides crucial This approach puts pressure on the manufacturing system, information to Stanton, Place decides to see the marketing which has been having difficulties lately. Recently, Roberts manager, Ron Adams. Adams explains how he arrives at has been receiving calls from long-time customers, such as the bow rake forecasts. Sears and Tru-Value Hardware Stores, complaining about Things don't change much from year to year. late shipments. These customers advertise promotions for Sure, sometimes we put on a sales promotion of garden tools and require on-time delivery. some kind, but we try to give Phil enough warning Roberts knows that losing customers like Sears and Tru- before the demand kicks in-usually a month or Value would be disastrous. He decides to ask consultant so. I meet with several managers from the various Sharon Place to look into the matter and report to him in sales regions to go over shipping data from last one week. Roberts suggests that she focus on the bow rake year and discuss anticipated promotions, changes as a case in point because it is a high-volume product and in the economy, and shortages we experienced last has been a major source of customer complaints of late. year. Based on these meetings I generate a monthly forecast for the next year. Even though we take a PLANNING BOW RAKE PRODUCTION lot of time getting the forecast, it never seems to A bow rake consists of a head with 12 teeth spaced one help us avoid customer problems. inch apart, a hardwood handle, a bow that attaches the head to the handle, and a metal ferrule that reinforces the THE PROBLEM area where the bow inserts into the handle. The bow is a metal strip that is welded to the ends of the rake head and Place ponders the comments from Stanton and Adams. She bent in the middle to form a flat tab for insertion into the understands Stanton's concerns about costs and keeping handle. The rake is about 64 in long. inventory low and Adams's concern about having enough Place decides to find out how Yankee plans bow rake rakes on hand to make timely shipments. Both are also production. She goes straight to Phil Stanton, who gives somewhat concerned about capacity. Yet, she decides to the following account: check actual customer demand for the bow rake over the continued continued TABLE C9.1 Four-Year Demand History for the Bow Rake DEMAND MONTH Year 1 Year 2 Year 3 Year 4 55,220 39,875 32,180 62,377 2 57,350 64,128 38,600 66,501 3 15,445 47,653 25,020 31,404 4 27,776 43,050 51,300 36,504 5 21,408 39,359 31,790 16,888 6 17,118 10,317 32,100 18,909 7 18,028 45,194 59,832 35,500 8 19,883 46,530 30,740 51,250 9 15,796 22,105 47,800 34 443 10 53,665 41,350 73,890 68,088 11 83,269 46,024 60,202 68,175 12 72,991 41,856 55,200 61,100 Note: The demand figures shown in the table are the number of units promised for delivery each month. Actual delivery quantities differed because of capacity or shortages of materials. past four years (in Table C9.1) before making her final report to Roberts. Questions 1. Comment on the forecasting system being used by Yankee. Suggest changes or improvements that you believe are justified. 2. Develop your own forecast for bow rakes for each month of the next year (year 5). Justify your forecast and the method you used. 000 N