The Pork Division of Grampian operates in a particularly challenging market. Pork products are very variable in their demand patterns; some are highly seasonal, such as barbeque packs, while other products are more stable. Moreover, variability of demand is strongly influenced by product promotions, which can cause an increase of over 300% in sales.
Due to the incredibly short customer lead times which are normally less than 1 day - the forecast is the primary instrument to generate the weekly and daily production plan across the 12 plants within the Pork division. The challenge is further compounded due to the short shelf life of the pork products and a fixed supply of pigs. The wrong forecast could not only lead to lost sales and poor customer service, but over production can lead to spoilage cost as the products pass their shelf life.
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