The sales team has just finished with the budgeting process for the new fiscal year. They are very excited and expecting the company's new educational computer lab program to be a big hit with colleges this fiscal year. This program is far above any of the ones the colleges are currently using and is moderately priced. They have budgeted a big year for sales!!!

The production team has just finished reviewing the sales team budget for the new fiscal year. "These people are off their rockers!!!" says Joe, the 20 year veteran production manager. "I've seen new products come and go and I don't believe we are going to have these kind of sales". "I don't either" says Ray, also a long time employee. "This sales team is fairly new, I don't think they realize that colleges don't spend money unless they have to, especially in this economy!".

"Well, I'm not budgeting for that much material. We will be stuck with too much inventory and everyone will be fussing. What will I do with all of it when they do not sell them all?" Joe shakes his head. "Oh brother, this is going to be a nightmare!"

If you have read this chapter, you know how critical budgets can be and why they are so important.

1. What can happen in this situation? Give some possible scenarios. 2. What should happen in this situation? Will the company make money or lose money? How should they decide who is right or wrong? 3. Will this sales budget really make that big of a difference to the company? Explain.