ABSTRACT
Tom continued his presentation, “In the spirit of making more money now and in the future, I want ask everyone a question,” Tom began. “How many of you here today have a problem with stock-outs at your factories?” At least five different hands went up, so Tom asked them all a question, but pointed to one of the General Managers who had his hand up. “Why do you think you have this problem?” he asked. The General Manager replied, “I’m pretty sure that we’re not very good at predicting what we need in the future.” “Why do you think that’s the reason?” Tom asked. “I think it’s just hard to predict our future needs,” he replied. “You know, customers will make an order and then right in the middle of fulfilling it, they’ll change their mind on how many parts they need. And when this happens, we end up over-ordering on some parts, while we’re running out of parts for another order,” he added. Tom could see others in the room agreeing with the General Manager.
