The forecasting department, traditionally reporting to the sale manager, has historically seen a forecast accuracy of about 60%, and this in turn causes problems for the following departments: Purchasing: What should we buy and how much? Production: What should we really build? Inventory management: We keep building the wrong thing. 1) Create a chart or timeline that includes all of the following: Which purchase orders have to be placed, and when When manufacturing needs to begin, to have products delivered to a customer Approximate dates for all of the following: When the product must be shipped to meet the customer’s due date When the application of the cover and packaging must take place to meet the customer’s due date When the manufacturing of the widget must begin and end When the raw material for the widget must be ordered When the plastic cover must be ordered When the cardboard box must be ordered Includes notes explain your timing calculation Assumes all of the following conditions: The factory has two departments: manufacturing and packaging Product X consists of 3 components a widget manufactured in the factory with a total manufacturing lead time of 1 week a plastic cover purchased from vendor A with a procurement lead time of 3 weeks a cardboard shipping box purchased from vendor B with a procurement lead time of 4 weeks The widget itself is made from steel (whose lead time from vendor C is 4 weeks). It takes 1 day for the cover to be applied to the product and for the product to be inserted in the box in the packaging department. The shipping time to this customer is in 3 weeks, and you do not want it to be late or early. Assume you received the customer order on 1/1/20XX. Ignore any holidays Assume a 5-day work week The customer requires the product to arrive at his location on 3/31/2011

Respected Sir,
There is always going to be forecasting error since it is not a exact science and if we do the things in a traditional way there is always going to be dilema in deciding about the following:
Purchasing:What should we buy and how much and when?
Production:What should we really build and when?
Inventory Management: What should we hold and duration of the same?
So,the solution lies in Just-in-time(JIT) which is an integrated set of activities designed to achieve high volume production using minimal inventories of raw materials,work in progress,and finished goods.Parts arrive at a workstation just when they are required and move through the operation quickly.It is based on the logic that nothing will be produced until it is needed.JIT works on a pull system.When an item is sold,the market pulls a replacement from the last workstation,that is,finished goods.
The last workstation in turn pulls parts or subassemblies from the station upstream of it and assembles another unit.The upstream station in turn pulls from the station immediately upstream of it and so on back to the release of raw materials.
For the pull system to work smoothly,high quality, strong vendor relationship, and a fairly steady demand is required.
The customer requires the product to arrive at his location on 03/31/2011.
Considering the company developed the culture of JIT and streamlined the processes in such a way that whatever be the fluctuation in demand it is thoroughly prepared for the same.
So,the timeline is as follows:
Name of process/Activity Date & Day Remark
Arrival at the customer location 03/31/2011 & Thrusday Arrival date as per purchase order.
Dispatch from the manufacturer(Finished Product) 03/10/2011 & Thrusday Shipping/Logistics time is 3 weeks.
Assembling of components widget,plastic cover wrapping and putting it into cardboard(Manufacture) 03/09/2011 & Wednesday Assembling time is 1 day.
Widget manufacturing from steel 03/02/2011 & Wednesday Manufacturing time is 1 week.
Ordering of steel from vendor C 02/04/2011 & Friday Delivery time is 4 weeks.
Ordering of cardboard from vendor B 02/11/2011 & Friday Delivery time is 4 weeks.
Ordering of plastic cover from vendor A 02/18/2011 & Friday Delivery time is 3 weeks.
Purchase order date 01/01/2011 & Saturday
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