Yankee Fork & Hoe Company Case/ Ch.10
• A. Synopsis
Yankee Fork and Hoe is a company that produces garden tools for a mature, price-sensitive market in which customers also want on-time delivery. Recently customers have been complaining about late shipments. The president has hired a consultant to look into the problem. The consultant traces the production planning process and its reliance on accurate forecasts. The consultant must make a recommendation to management.
• B. Purpose
This case provides the basis for a discussion of the need for accurate forecasts in an industry where low-cost production is critical. It also contains sufficient data to generate forecasts for each month of the following year. Specifically, the case can be used to:
1. Discuss the effects of poor forecasts on capacities and schedules.
2. Discuss the choice of the proper data to use for forecasts.
3. Quantitatively analyze forecasting data and provide forecasts for the following year.
• C. Analysis
Yankee Fork and Hoe is experiencing two major problems with the current forecasting system. First, the production department is unaware of how marketing arrives at its forecasts. Production views the forecasts as the result of an overinflated estimate of actual customer demand. However, the forecasting technique in use by the marketing department is based on actual shipments rather than on actual demand. Second, marketing, in its desire to reflect production capacity, is compounding the problems experienced by Yankee Fork and Hoe by trying to rectify past problems. Although marketing adjusts for shortages in the actual shipment data, it is still reflecting past problems and not future demand. If Yankee would move to a system that utilizes past demand to forecast fu ...