In order to satisfy the demanding financial community

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Reference no: EM132230698

In order to satisfy the demanding financial community, Supply Chain Management Unlimited, LTD must demonstrate ever-improving earnings on a quarterly basis. At the same time, it must boost profitability by rapidly introducing new products. Virtually no lag is permitted. Yet this relentless pressure is having a serious impact on the company’s performance as well as that of the total supply chain.

The company’s business units experience a demand spike in sales during the last few days of each quarter. Up to 30 percent of its quarterly business might be transacted in that brief period. But the irregular pattern of supply and demand isn’t the result of any oddities in the industry, nor is it the result of an underlying customer demand pattern. It’s purely an artificial situation, caused by the sales force scrambling for business at the end of each reporting period. Often that means artificially pulling demand forward to make sales targets. What’s more, the erratic pace of sales leads to periods during which the company might not have enough inventory to fulfill demand. Other times it has too much inventory, whether finished goods, work in process or raw material. The forecasting system is failing to accurately predict these variations.

How do these sales policies influence the Supply Chain Management Unlimited, LTD and its suppliers and customers? What possible solutions should be investigated that might meet the needs of all the constituencies (the company, its suppliers and customers, and the financial analysts)?

Response should be in paragraph form.

Reference no: EM132230698

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