Description Of A General Strategy

The company started off producing 20,000 units of mountain bikes. We did not change the production quantity. Last year our forecast sales were 24,000 when we only sold 19,866; therefore we thought it would be best to leave production at 20,000 bikes. Having excess inventory, we concluded that 20,000 units should be enough considering our quality has not changed and our advertising will not increase the sales dramatically. Although we had the choice to produce as much as 30,000 units, we felt as though we did not have sufficient money to increase production. We were interested in allocating the money towards marketing as opposed to production. We realized that without awareness, no matter how many units we make, sales would be inefficient.

After I had made my choices in quarter for I checked the pro forma and made adjustments to factory capacity and demand to insure we could hit profitability. I did cut too close on the inventory because we had loss sales due to stock outs. The lost sales did not come close to what our losses where due to excess capacity and inventory holding costs in Quarter 2 and Quarter 3. Pro forma are a crucial peace of the Simulation. Once I fully grasped the concept I was able to make better decisions for Lean in enterprises.

The second task that needed to be finished was to forecast the income statement and the balance sheet for the next two years. We grew sales at a 15% rate, which is the stated rate from Koh. Also, in forecasting the balance sheet, we only showed debt financing for the capital expenditure of the DVD manufacturing equipment, which was the requested structure. Other relevant facts and assumptions for preparing the financial forecast are stated below-

Also, due to the requirement that AEO must enter in to production agreements with suppliers far in advance in order to guarantee inventory, they are even more exposed to fluctuations in consumer preference or economic changes such as a drop in consumer confidence or discretionary spending. AEO appears to typically have an inventory turnover ratio of approximately 6, which is lower than the industry average of 10. This means that AEO on average takes longer to sell its inventory and means that they must forecast demand effectively or risk excess inventory. In terms of a material misstatement, it is imperative that

In 2004, the firm overestimated the demand for a new product family for the high end consumer market (need to extend the scheduled end-of-life by six months) and underestimated the cannibalization of the ShootXL by another newly introduced product the OptixR. Leitax didn't have a single, unified forecast to coordinate their operations. Sales developed their own projections, which production distrusted because the sales organization has the incentive to produce low-ball projections so they can "beat the mark."

Improper inventory management affects long term profitability and may fail ultimately. 10 to 20% of inventory can be reduced without any adverse effect on

The company may have to pay higher production costs or may not be able to produce and

During performing the sales forecast for Victoria's Secret, I learned that for most part that Victoria's Secret has an incline in their profits. They have however hit a few bumps here and there. The causes of this could be more cost for Victoria's Secret purchasing materials and production of their products. Another reason for this could also be a slower rate in sales than usual. Like I said, for the most Victoria Secret has seen an incline in their profits and sales throughout the years. Performing the percentage of sales forecast for Victoria's Secret, I established a forecasted sales of 5 percent which means that they would have to have a sales of $2,808 compared to their last years $2,675. This is a very feasible number for Victoria Secret to achieve, considering that majority of their money in assets outweighs their liabilities.

Coca-Cola is a multi-national corporation that has its headquartered in Georgia, Atlanta. The company involves itself in the business of beverage production. Subsidiary plants are located all over the world i.e. Asia, Africa, Europe, Australia and South America. Since the company has many branches and deals with a whole lot of inventory, there is a need to act proactively and timely so that there are no delays in logistics. Projections of inventory, i.e. inventory forecasting, are often done in the operations and supply chain management so that overproduction and inefficiencies are avoided. Coca-Cola also uses historic data to find out the direction of future trends (Butler, 2015). The process is used by the company to determine near accurate allocation of budgets for future production periods (Jacobs, 2013). There is a need for Coca-Cola as a company to find out the events that affect the company production wise. The occurrences include expectations of sales, and whether they will cause an increase or a decrease in the share price of the company. Nonetheless, forecasting provides a necessary benchmark for Coca-Cola, which has a long-term perspective of operations.

Such variations and changes will be strong barriers against implemented EVM as EVM always measure actual progress and cost against baseline budget and schedule, so unless those baselines got revised to accommodate changes, EVM will have no meaning. But in same time, changing base lines will have a negative impact on EVM accuracy in forecasting. (Kim and Kim,

As seen in (Exhibit 2-6), the inventory turnover ratio dropped in the year 1996 which indicates a problem in distribution or a downturn in consumer demand. Another problem indicated in the days’ sales outstanding ratio which indicates a

As we can see the demand has been varying a lot in 2009. This has induced a forecasting error by the sales people in the manufacturing organization.

❖ Adjustments to inventory levels should be made in order to accommodate demands during peak seasons and low selling months.

* During this long period of anticipation of demand, fluctuations in actual sales can lead to stock-outs or excess stock.

•Also, there should have been three production lines with output of 1,000 units per day per line but there were only