Nichols Cookie Company

Nichols Company Case Study

Introduction

Nichols Company currently has 355 full-time employees who are responsible in manufacturing the three primary products: A, B, and C. With the demand of the products, the organization is an issue with having enough finished products in inventory. In the next couple paragraphs, I will summarize the case study along with determining which of the four primary forecasting techniques is the best choice for the company and justifying my selection. In addition, I will explain the impact of aggregate planning on workforce size inventory quantity and production levels for the company and moreover, weigh the various cost factors associated with carrying inventory. Furthermore, I will explain how the concepts discussed in the case can be applied to my workplace, and make recommendations for the organization based on my experience and reading.

Summary

Joe Williams, president of Nichols Company, is having a frustrating issue with the inventory levels.

Jacob Kalich (second left) in Mezrach und Maarev, ...

JACOB NEILL

JACOB LOKO

With the inventory levels being high, the stock outs continue to occur; resulting in late deliveries, complaints and cancellations. Williams called a meeting with Barney Thompson, director of marketing, Allison Bright of production and inventory control, Trevor Hanson of purchasing, and Margaret Wu of accounting to resolve the issue. At the meeting, Bright mentioned that the marketing forecast were leading to unnecessary cost of overtime. Moreover, Bright required purchasing in bulk to meet the cost constraints. However, Barney Thompson complained that the delays in delivery and the lack of finished goods in inventory led to cancellation of orders and lower sales. Margaret Wu stressed the need to keep inventory levels low due to the higher costs of higher levels. Lastly, Wu stated, "we can't afford the holding costs, not to mention how fast technology changes around here causing...