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They also do not communicate with the supply management team to see if what they are selling is feasible and if they have the raw materials to produce more if the warehouse is emptied by these sales. By increasing communication between marketing and production ABC will be able to reduce the demand variability. ABC Company’s present condition is causing the unnecessary cost throughout the supply chain. The creation of a new matrix will give new insight into ABC’s current production dilemma.
The ABC Company must look at what is causing this demand volatility. It is clear that the demand volatility is being caused by the sales force offering incentives at the end of the quarter to increase the sales numbers...
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