Please describe a scenario that you have encountered recently as a consumer wher
ID: 347148 • Letter: P
Question
Please describe a scenario that you have encountered recently as a consumer where a business has either under forecast or over forecast demand for a product that you were planning to purchase. You will generally notice under forecasting if the product is out of stock or over forecasting if there is excess inventory for the item. Please describe the implications to the retailer, manufacturer, and broader supply chain. You can present your response through the lens of your own discipline (accounting, marketing, etc.) if you wish.
Explanation / Answer
The company Suzuki is a very popular automobile manufacturer in the Indian market. People love the brand for their cost effective and low maintenance cars that also give excellent mileage. The company sold a good number of cars under Brezza model. But the company failed to forecast the demand and it resulted in lack of stock in the showrooms even when the customers were ready to make full payment to get the car. The customers were disappointed to know that they had to wait for a minimum period of 4 months to get the car delivered. This put some serious questions on the ability of the car maker to forecast sales and meet the demand with supply.
The retailer was not able to market the cars aggressively as they were not sure about the supply of the cars. They had to hold the advance bookings so that the customers are not disappointed if they fail to get their car in the promised period of time. It was also a good news for them to know that the customers are interested to buy the car so badly but it is never a good idea to keep the customers waiting for a period of 4 months to get a car like compact SUV. The manufacturer also incurred loses by not meeting the demands. They built a great product but failed miserably to deliver it on time. They had to change their production schedule to sell more cars and also to market them aggressively in the Indian market. The supply chain depended on the manufacturer and the retailer for their business. The supply chain was helpless without the goods from the manufactuerer and orders from the retailer. The company had to make sure that the customers do not come to know the problem with the supply chain and show that the manufacturer is manufaturing the cars and the supply chain department is very much active. This definitely affected the marketing activities and the delay put them on the back foot when the sales were really high.