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In the current mode of operation each vendor tries to minimize his variance which increases as we move up the supply chain leading to huge fluctuations at the production unit. Sporadic sales promotions by Barilla are also affecting the demand. This leads to increased demand for the items on promotion and because of the lack of effective forecasting techniques used to predict this increase, the existing inventory for these items is affected. The volume discounts given to distributors may be forcing them to order in quantities that are too large, aggravating the problem by increasing the variability in demand...
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