Big Marketing Company. Figure 1 shows the
demand chain of a big marketing company. The
case company manufactures a number of different
products for the marketing company. Electronic
data interchange (EDI) is used in communication
between the marketing company and the wholesaler
to provide data on consumer needs. Based on this
demand information, forecasts are made for sixmonth
periods. Open orders are given to the contract
manufacturer every four months. The fixed order
period is one month.
The final products could be stocked in four
stages: in the factory, in the inventory held by the
marketing company, in the distribution centers
of the wholesaler, and in the stores. The contract
manufacturer is able to deliver unplanned orders
within one week. The products are shipped either
to the marketing company, to the wholesaler, or
directly to the stores. In the future, direct deliveries
to the stores will be more common and the use of
electronic data interchange will increase.