Michelle Sayer is Johnson & Johnson's Walmart account manager, meaning that she oversees all operational interactions between Walmart and Johnson & Johnson. The Walmart account is so important to J&J that Michelle actually lives in Bentonville, Arkansas, which is where Walmart's corporate headquarters is located.

Rafael Elwood works for Walmart and is Michelle's main contact person. Rafael was concerned that Walmart was not purchasing as efficiently from J&J as it could, so he arranged for a meeting with Michelle to discuss their strategy.

To focus the conversation, Rafael suggested they look at one product. Listerine Cool Mint 250 ml. L Table 12.6 reports sales data for that product in one of Walmart's stores over a 30-week period, while L Figure 12.3 displays the data in a graph. Table 12.7 provides data on demand, ordering costs, and holding costs for this product.

Then, answer the following question: Putting aside the issue of ordering a single tier (which requires some more information to come to a resolution), Rafael wanted to raise another issue with Michelle. Looking at L Figure 12.3, he points out that there are periods of time when demand looks like it is 50 percent higher than the average, and other times when demand is as much as 50 percent lower than the average. Given this variation in demand, he wonders if choosing a single order quantity (in cases) is a reasonable strategy. Or should it adjust its order quantity throughout the year? Making adjustments to the order quantity would be a hassle, especially given the number of products it manages and the number of stores it has, but if it needs to do that to save on costs, it will.

Figure 12.3 Weekly sales of Listerine Cool Mint 250ml at one Walmart supercenter