Problem
T.T.S Candle Company
Ciera Miller, president of T.T.S. Candle Company, has just completed a two-day seminar on project management and is anxious to use the new techniques on a recurring problem faced by her company. About 60 percent of T.T.S.'s gross revenues result from the pre-Christmas sale of the firm's major product, XMAS-PAK. XMAS-PAK consists of twelve candles, all of one color and size. There are six different colors available in three different lengths. XMAS-PAK was introduced eight years ago, and sales have been increasing by about 20 percent yearly.
Because of the seasonal nature of the product, all orders unfilled on December 16 are lost. Ms. Miller estimated that XMAS-PAK sales would have been about 10 percent higher last year were it not for lost orders. It was a frustrating problem because the loss was not due to a shortage of capacity. Sales forecasts were not very accurate, and her manufacturing managers had strict instructions to minimize investment in finished goods inventories. Miller was sure that project management could somehow help solve the problem without appreciably increasing inventories.
On her return from the seminar, she assigned Sam Joseph, marketing manager, and Garrett Knight, vice-president for manufacturing, as project managers for this problem. She reviewed the problem with them and gave them eight years of historical sales data, broken down by line item and geographical region. These were the data that she had used during her initial investigation. The project objective was to reduce lost sales to .5 percent within five years.
TTS Candle Questions:
a) Discuss Ms. Miller's approach to the problem and list the pros and cons.
2. What department is primarily responsible for the loss in sales?
3. What could be done with the previous eight years of sales data to help solve the problem?