What is the Flowchart of the forecasting process of this company?

CASE Yankee Fork and Hoe Company The Yankee Fork and Hoe Company is a leading producer of garden tools prospects for large increases in sales are not bright. Keeping ahead of the ranging from wheelbarrows, mortar pans, and hand trucks to shovels, rakes, competition is a constant battle. No one knows this better than Alan Roberts, and trowels. The tools are sold in four different product lines ranging from the president of Yankee. top-of-the-line Hercules products, which are rugged tools for the toughest jobs, The types of tools sold today are, by and large, the same ones sold 30 to the Garden Helper products, which are economy tools for the occasional years ago. The only way to generate new sales and retain old customers is user. The market for garden tools is extremely competitive because of the to provide superior customer service and produce a product with high cus- simple design of the products and the large number of competing producers. In tomer value. This approach puts pressure on the manufacturing system, which addition, more people are using power tools, such as lawn edgers, hedge trim- has been having difficulties lately. Recently, Roberts has been receiving calls mers, and thatchers, reducing demand for their manual counterparts. These from long-time customers, such as Sears and True Value Hardware Stores, factors compel Yankee to maintain low prices while retaining high quality and complaining about late shipments. These customers advertise promotions for dependable delivery. garden tools and require on-time delivery. Garden tools represent a mature industry. Unless new manual products Roberts knows that losing customers like Sears and True Value would be can be developed or a sudden resurgence occurs in home gardening, the disastrous. He decides to ask consultant Sharon Place to look into the matterand report to him In 1 week. Roberts suggests that she focus on the bow rake as a case in point because it is a high-volume product and has been a motor source of customer complaints of late. Planning Bow Hake Production A bow rake consists of a head with 12 teeth spaced 1 inch apart, a hardwood handle, a how that attaches the head to the handle, and a metal ferrule that reinforces the area where the bow inserts into the handle. The bow is a metal strip that is welded to the ends of the rake head and bent in the middle to form a flat tab for insertion into the handle. The rake is about 64 inches long. Place decides to nd out how Yankee plans bow rake production She goes straight to Phil Stanton1 who gives the following account: Planning is informal around here. To begin. marketing determines the forecast for bow rakes by month for the next year. Then they pass it along to me. Quite frankly, the forecasts are usually inatedmust be their big egos over there. I have to be careful because we enter into long-term purchasing agreements for steel. and having it just sitting around is expensive. Sol usually reduce the forecast by 10 percent or so. I use the modied forecast to generate a monthty nal-assembly schedule. which determines what I need to have from the forging and woodworking areas. The system works well if the forecasts are good. But when marketing comes to me and says they are behind on customer orders, as they often do near the end of the year. It wreaks havoc with the sched- ules Forging gets hit the hardest. For example, the presses that stamp the rake heads from blanks of steel can handle only 1000 heads per day. and the bow rolling machine can do only 5.000 per day. Both operations are also required for many other products. Because the marketing department provides crucial information to Stanton, Place decides to see the marketing manager, Ron Adams. Adams explains how he arrives at the bow rake forecasts. Things do not change much from year to year. Sure. some times we put on a sales promotion of some kind. but we try to give Phil enough warning before the demand kicks inusualty a month or so. I meet with several managers from the various sales regions to go over shipping data from last year and discuss anticipated promotions. changes in the economy. and shortages we experi- enced last year. Based on these meetings. I generate a monthly forecast for the next year. Even though we take a lot of time getting the forecast, it never seems to help us avoid customer problems. The Probiem Place ponders the comments from Stanton and Adams. She understands Stanton's conoems about costs and keeping inventory low and Adams's concern about having enough rakes on hand to make timely shipments. Both are also somewhat concerned about capacity. Yet she decides to check actual customer demand for the bow rake over the past 4 years {in Table 3.6) before making her final report to Roberts. UESTINS 1. Comment on the forecasting system being used by Yankee. Suggest changes or improvements thatyou believe are justified. 2. Develop your own forecast for how rakes for each month of the next year grear 5). Justify your forecast and the method you used. TABLE 8.6 FOUR-YEAR DEMAND HISTORY FOR THE BOW RAKE DEMAND Month Year 1 Year 2 Year 3 Year 4 1 55,220 39,875 32,180 62,377 2 57,350 64,128 38,600 66,501 3 15,445 47,653 25,020 31,404 27,776 43,050 51,300 36,504 5 21,408 39,359 31,790 16,888 6 17,118 10,317 32,100 18,909 7 18,028 45, 194 59,832 35,500 8 19,883 46,530 30,740 51,250 9 15,796 22,105 47,800 34,443 10 53,665 41,350 73,890 68,088 11 83,269 46,024 60,202 68,175 12 72,991 41,856 55,200 61,100