World Company Case

1. Evaluate World’s forecasting and planning process.

World’s forecast and planning process led to short lead time, fast transportation, and

flexibility. World Co.’s planning identifies drivers of different factors and improves past

forecasts. A demand forecast is an estimate of future customer orders for products and or

services. Usually the forecasts are used to make decisions in the following categories: financial

planning, sales planning, and resource planning.

Good inventory management leads to low lead times and can help avoid unnecessary

risks. World Co. reserves capacity without actually committing to the production of a specific

product. Fabrics that have not been dyed are stocked in order to reply to changes in style/color

preferences quickly. Generic parts for products are always available and kept in stock. The firm

minimizes risk of overstocking materials through its agreements with suppliers. The firm can

order the amount of material it needs, and will only be contracted to buy a certain percent of it.

All of the above are great examples of great inventory management and negotiation.

The firm forecasts demand in a variety of ways. Using the Obermeyer method, this is an

adapted system that uses a voting system which is used to rank products. The Obermeyer

method uses a meeting of 20 store managers and assistants. The manager record their

thoughts and ideas on ballot, and puts ranks of fabrics and then eventually analyzes these

decisions. This method is important because the voters are similar to potential customers which

are woman ages ranging from 25-29. Also, the twenty women picked for voting, lived in urban

areas that matched the urban setting of the stores. Obermeyer method is used to derive

demand forecasts and the standard deviation of demand at the SKU level.

Also team members are constantly striving to better the company. Examples being,

employees looking for better locations within department stores, achieving brand...