Yankee Company

Yankee is a company that produces garden tools that are sold in four different product lines ranging from top-of-the-line to economy and the tools they produce ranges from mortar pans, wheelbarrows, shovels, rakes, trowels to hand trucks. The garden tools market is very competitive and mature as the products have very simple designs and there are many competitors in the market. Furthermore, substitutes are (power-generated tools) are available in the market. Yankee needs to keep prices low while focusing on reliable delivery and high quality to keep its position as a leading producer.

Yankee has no formal method to forecast demand. The marketing team forecasts demand by month for the following year and the numbers they give to the operations side is said to be inflated, and they will reduce the forecasted numbers by approximately 10%. This shows that there is no collaboration and trust between the marketing and operations teams in forecasting demand which leads to delays in shipment to customers.

Furthermore, the marketing team uses “shipping data” from the past year to discuss about promotions, changes in the economy and shortage problems from the past year and based on these, they will come up with the demand forecast for next year. This will not be an accurate and reliable forecast as compared to using the actual demand numbers.

The operations team does not keep any inventory at hand because they are concerned about the high costs that comes with it, but there is no safety stock to ensure that shipments can meet customers’ demands that are higher than the forecasted figures.