Logistics Supply Chain Management Course Module 2 Case assignment

Sep 19th, 2015
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Question description

I am including the background info on Module 2 and the Case assignment as well.  I am also including an attachment you may need for this assignment Extended Enterprise Supply Chain.ppt :

Module 2 - Background

Forecasting/EESC

Virtual World

EBBD EMAIL - for Internal Use Only

To: You

From: Danny Wilco <dwilco@ebbd.com>

Subject: Re: Forecasting at EBBD

I want to give you a little more information about how we do forecasting and what we would like to know, to help guide you in this project.

Once a month, the Management Team meets to review our monthly financial report and the quarterly results once every three months. After we look at the financial picture in terms of costs and budgets, we look at sales, mostly in terms of volume. We compare the monthly volumes to our latest forecast that we generated in the previous monthly meeting. Then we try to generate the next month’s sales forecast and update the quarterly forecast and the annual forecast. Of course this gets easier each month as we approach the end of the year. As you know, we have about 1500 individual products in inventory, which we have aggregated into 11 product lines. We are looking at the numbers based on product lines, not individual products. We consider adding new products that our current suppliers are discussing with us and want us to distribute.

In November, when we have two months in the year left, we begin to forecast the annual sales for the next year, again based on product lines. We discuss our strategy for each product line, expanding or contracting each one. We discuss other potential product lines from suppliers we don’t currently carry. We look at new products that are coming on the market from both current suppliers and other suppliers. We generate a trial forecast for next year.

In December, we revisit the trial annual forecast that we created in November. We finalize any new information, make final decisions on existing and new products, and finalize the annual forecast. Then we create the quarterly forecasts for each quarter. And finally we create the monthly forecasts for each of the first three months of the year. All this is done using spreadsheet technology.

One area which we want to add to the forecasting process is determining inflation factors on a quarterly basis. Most of our suppliers will pass along inflation of their costs on a quarterly basis. If we could forecast this inflation with some degree of accuracy, we could better utilize our inventory capacity and optimize profits. At the moment, we simply guess at inflation factors. We would like to know if there is a way to forecast these.

Be sure to mull this over. In the next few days I will give you a specific assignment on just what we want you to do.

~DW, VP LogOps.

Learning Wizard

Case 2 Resources

Read the following resources to gain requisite knowledge about forecasting for this task.

Specific Information you need to identify to use in your report:

  • Why is forecasting important in a distribution company? What is it you are specifically forecasting and what is this used for?
  • Why is forecasting accuracy important? How accurate does a forecast need to be?
  • What is the difference between forecasting for existing product lines and for new products?
  • Why should companies spend time and money to improve forecasting accuracy?
  • How should a company use different methods but yet integrate these methods?
  • How does strategic planning fit in with forecasting (at least for long term forecasting/planning)?

What is Forecasting and why is it necessary for Logistics?

Shamim, M. (2009). Encyclopaedia of logistics management: Volume I. Mumbai, IND, Global Media.

NOTE: The above resource provides good information about Logistics in general. Read Ch. 5 for info on planning and long term forecasting. Ch.6 is about forecasting. It is a bit long-winded, but you should find sections of it useful.

Various methods of Forecasting***THIS IS A MUST READ!!

Armstrong, J.S. (2001). Principles of forecasting: A handbook for researchers and practitioners. Hingham, MA, USA: Kluwer Academic Publishers.

This is a great article on forecasting inflation:

Meyer, B.H., & Pasaogullari, M. (2010). Simple ways to forecast inflation: What works best. Federal Reserve Bank of Cleveland.Retrieved from https://www.clevelandfed.org/Newsroom%20and%20Events/Publications/Economic%20Commentary/2010/ec%20201017%20simple%20ways%20to%20forecast%20inflation%20what%20works%20best

NOTE: keep in mind that EBBD is a distributor, it buys and sells, it does not produce. What is the focus of forecasting for this type of business?

You may want to do independent research to find additional resources on forecasting in the field of logistics and distribution. But be sure to read the ones here, too.

SLP 2 Resources

The Extended Enterprise Supply Chain

While the case in this module focuses on the micro-level fundamental of logistics, forecasting, this SLP will focus on the fundamental at the macro-level, the Extended Enterprise Supply Chain. All products and services are part of some supply chain. In fact there really is one big network in the world that is the complete global supply chain. But let’s keep our focus somewhat narrow as we introduce this concept. You will develop the EESC for the target product, company, and industry you chose in SLP1.

Download and review this PowerPoint on the Extended Enterprise Supply Chain using Beer as an example. (Extended Enterprise Supply Chain)

Readings

How are businesses and industries classified and coded? The North American Industry Classification System (NAICS) has been in use since 2002. This link takes you to the page on the website for the 2007 version.

North American Industry Classification System(2007).US Census Bureau. Retrieved from http://www.census.gov/cgi-bin/sssd/naics/naicsrch?chart=2007

Here is the overview for Module 2 Case Assignment:

Module 2 - Case

Forecasting/EESC

Virtual World

EBBD EMAIL – for Internal Use Only

To: You

From: Danny Wilco <dwilco@ebbd.com>

Subject: Re: Forecasting at EBBD

The Management Team is all for your efforts to investigate EBBD’s forecasting situation. We want you to thoroughly analyze what we are doing, what other forecasting methods and techniques are available, and make a recommendation on how we should proceed. We are particularly interested in how to improve our short term forecasting on an annual, quarterly, and monthly basis. We also would like to know how we could do longer term forecasting, say over two or three years. And we want to know how we can generate quarterly inflation forecasts.

The Management Team wants to know

  • What are the various methods that we should use?
  • Who will do the forecasting?
  • How will the forecasting methods be implemented?
  • Why should EBBD spend any money on this new methodology? Why do we care about improving our forecasting and why is it worth the costs to improve it?

The report should provide an initial section on the background of the situation, assumptions that we need to make, discussion of your analysis of various forecasting methods, and then a recommendation with a justification as to why you are making the recommendation.

One more thing – the Management Team might want you to make an oral presentation. So you should also prepare a draft version of a PowerPoint presentation. This does not need to be a finished product, but a draft version.

The written report should be comprehensive and articulate. Send me the report and the draft PowerPoint when you have them finished. Let me know if you have any questions along the way.

~DW, VP LogOps.

Learning Wizard

Use the readings in the Background to familiarize yourself with forecasting and forecasting methods. You should also search for additional information pertaining to forecasting in logistics and distribution.

Specific Information you need to identify to use in your report:

  • Why is forecasting important in a distribution company? What is it you are specifically forecasting and what is this used for?
  • Why is forecasting accuracy important? How accurate does a forecast need to be?
  • What is the difference between forecasting for existing product lines and for new products?
  • Why should companies spend time and money to improve forecasting accuracy?
  • How should a company use different methods but yet integrate these methods?
  • How does strategic planning fit in with forecasting (at least for long term forecasting/planning)?

You should know the answers to these questions and use this information in your Report to Danny Wilco.

Using the background information about EBBD’s forecasting situation and the information you obtain from the background readings and your research, write a report to Danny Wilco, addressing the questions that he posed. Then develop a draft Powerpoint presentation.

Upload the Report into Case 2. Upload the draft Powerpoint into Additional Files in Module 2.

Assignment Expectations of the Written Report - Be sure to write this report to your boss, Wilco.

The report should thoroughly address these aspects in depth and breadth:

  • Problem situation: clearly elucidate the current situation at EBBD
  • Assumptions: assumptions that need to be made and critical evaluation
  • Evidence: identifying information about different forecasting methods relevant to the problem
  • Possible solutions: combinations of different methods and techniques to meet the requirements
  • Recommendations: which methods and techniques are best for which specified needs
  • Justification & Explanation: clear reasoning as to why the recommendations were made
  • Writing style & Organization: well-formed sentences and paragraphs, well organized with flow of reason, and good use of language that pertain to concepts and terminology
  • Use of references & Citations: at least four references. Appropriate use of APA Style is required in this paper.

Expectations of the Draft Presentation

The draft PowerPoint should address these aspects:

  • Organization: the deck has a cover slide and at least 4 content slides, and information is arranged in understandable order
  • Content: the deck uses bullet points that articulate and interpret key points of the report and shows relevant data, charts, graphs; notes are used in Note section of slides and possible themes of the presentation are suggested.



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