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Scotts was in the middle of its selling season in 2 0 2 0 when Covid - 1 9 shut down much of the global
Scotts was in the middle of its selling season in when Covid shut down much of the global economy. Scotts' production had to respond, but like many firms, response was chaotic with production disruptions caused by sickness and an abundance of caution which dropped entire shifts. It also soon became clear that homebound families were gardening more. Keeping stores stocked became a problem. And despite shortages, sales were up in and another in
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So just months ago, Scotts was bracing for the biggest summer ever. After two years of struggling to fill store shelves, the company had ramped up production to catch up with consumer demand for lawn seed, fertilizer, and other garden products. Massive investments in new manufacturing capacity were about to pay off as Scotts prepared for the usual rush of May orders from retailers looking to replenish their stocks. The CFO assured investors that Scotts was in a good place on inventory and that the firm was expecting banner sales.
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But the orders never came. The pandemic was over, and inflation hit. Retailers cut orders. Scotts has cut jobs and more layoffs are coming. Production schedules have been cut. Available cash is a fraction of what it was. Nobody is getting bonuses. Scotts was largely a casualty of bloated inventory at big retailers such as Walmart, Target, and Home Depot. Those companies didn't foresee the sharp reversal in buying behavior that has taken place in recent months as shoppers, squeezed by inflation, cut back on furniture, electronics, and other goods, and shifted spending to travel, food, and fuel.
Source: The Wall Street JournalSept
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Critical Thinking Questions
The COVID pandemic caused
A
Scotts to seek domestic suppliers for its MiracleGro fertilizer.
B
demand for fertilizer to increase.
C
demand for fertilizer to decrease.
D
the US government to force fertilizer producers to switch to production of sanitizers.
E
fertilizer prices to double.
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Which forecasting method should Scotts have used to forecast sales for its MiracleGro fertilizer?
A
simple moving average
B
trend projection
C
weighted moving average
D
something not based entirely on historical demand
E
exponential smoothing
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