Harmonizing Demand Forecasting and Supply at Mahindra & Mahindra Ltd.
(3 pages of text)
Mahindra & Mahindra Ltd., a US$15.4 billion company in 2012, has been the number one tractor manufacturer in India for the last 30 years. The agriculture tractor sale market in India is seasonal in nature and growing. To meet demand, the company has four manufacturing plants and 26 sales offices across the country; their main job is to coordinate supplies between its 800 dealers and the company. The sales offices provide a rolling tractor demand forecast for the current month plus two months in the future; it is used to determine the number and models of tractors to manufacture and to enable placing parts supply orders in advance. The deputy general manager of sales in the company’s Farm Division has been receiving an increasing number of complaints from irate dealers about the irregular and short supply of tractors from the company’s stockyards. This has created stress and low dealer satisfaction. The deputy general manager has decided to improve the demand forecasting of agriculture tractor sales and hence supply management.
Student spreadsheet 7B13D019
with data is available.
The case is intended for courses in decision science, sales forecasting and/or econometrics. It presents an opportunity to do the following:
- Perform quantitative forecasting on short (e.g., monthly) to medium (one- to two-year) terms.
- Learn the use of historical data for past pattern and time series methods.
- Understand the different options available to a manufacturing firm to manage production strategy to support seasonal and irregular demand.
India, Large, 2012
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