Question: What is the alternative solution on this? AFG Co. basis for Production. The production department uses the sales forecast as basis for production output and
What is the alternative solution on this?
AFG Co. basis for Production. The production department uses the sales forecast as basis for production output and scheduling. The sales forecast is reduced by actual stock-on-hand so as not to produce more than what was forecasted and to prevent surplus products. The product has only three (3) months shelf-life meaning it will expire after 3 months. Thus, the company must not produce more than the forecast. Key Accounts customer are so particular with product shelf-life that you cannot deliver to them more than one month old products. This customer requirements has to be complied by AFG Company because if not the key accounts will reject deliveries and this will result to sales deduction as return.
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