Overcoming forecast problems at Racal Recorders Racal Recorders manufactures recording systems which are used in many applications, from recording emergency telephone conversations through to recording automobile performance on the test track for later analysis. The technology of these products is sophisticated and the task of controlling their manufacture complex. Racal Recorders is the market leader with a turnover of around 30 million per annum. One of its major production planning and control problems is how to coordinate the production and movement of all the parts which go into its products when virtually all products and systems are configured to meet the requirements of individual customers. An MRP system is needed to translate orders and forecasts into works instructions for purchasing and manufacturing parts, sub-assemblies and finished products. Its main problem was that after running the MRP process, the finished goods were put into stock to await customer orders. Yet the orders, when they came, never exactly matched what had been manufactured based on the forecast of demand. Some products remained in storage while others had to go back to the workshops to be re-manufactured to form the configurations that customers really did want. Racals solution to this was to analyse the common elements within its systems and manufacture modules which could be built up to make whole systems. Forecasts were prepared for the modules which, when manufactured, were kept on the shop floor until orders were firm. On the receipt of a confirmed order, the modules could be assembled to form the finished system as specified by the customer. Questions 1 What exactly seems to be the problem with Racals forecasting system? 2 What is the advantage, as far as planning and control is concerned, of forecasting demand at a modules level?