Prof. Howard Weiss always has an interesting view of OM to share with our readers
We are currently in the middle of the Girl Scout cookie season. Several operations issues discussed in your Heizer/Render/Munson textbook face the Girl Scouts.
Location Only two manufacturers bake Girl Scout cookies. ABC Bakers is in South Dakota and supplies 25% of the cookies while Little Brownie Bakers is in Kentucky and supplies 75%. Six of the nine types of cookies are baked at both bakeries but each bakery also bakes three flavors that the other does not bake. (See the map).
Transportation If the types of cookies baked at the two bakeries were identical then this would lead to a transportation model as explained in Module C of your textbook. The model would include 2 sources (bakeries) and over 100 destinations (Girl Scout Councils). However, each Council can select whichever bakery they want to use which means that there is no attempt to minimize shipping costs.
Forecasting Recently, the Girls Scouts put out a new cookie, Adventurefuls. Forecasting demand for Adventurefuls was difficult because there were no past sales available to help create the forecast, so the quantitative methods in the forecasting chapter (Ch. 4) could not be used. The forecast for the new cookies was considerably lower than the actual demand and meeting demand was compounded by a labor shortage due to COVID. The Aggregate Planning chapter (Ch. 13) lists five methods for handling differences between supply and demand. There was no inventory that could be used; increasing the workforce, using part-timers or subcontractors was not feasible– so the only method left was to influence the demand. The Scouts placed a cap on the amount of these cookies that each troop could order.
Supply Chain In 2023, another new cookie, Raspberry Rally, was introduced and, again, demand was underforecast. This time a major reason for the poor forecasting was that customers could order the cookies exclusively online rather than through a girl scout. The production could not be increased because the manufacturer needed a long lead-time to produce the cookies and there were power outages at the Kentucky plant. A new distribution channel opened as some people were offering up their Raspberry Rally cookies on eBay for $20, $50 or even $200 a box instead of the usual $6 per box.
Classroom Discussion Questions:
1. Suggest a method for forecasting the sale of new Girl Scout cookies.
2. If the Girl Scouts wanted to minimize costs would each council receive their cookies from the nearer of the two bakeries? Why or why not?