Case of commercial Feed company

The Commercial Feed Company (CFC) was unsuccessful in making accurate forecasts of the demand for its products and their inaccurate forecasts were resulting in excessive inventories when demand was overestimated and inventory shortage when demand was underestimated CFC bought vitamins, minerals, corn or some other grain, and a protein supplement such as soybean meal, and processed them into animal feed which was sold to farmers and feedlot operators in several Midwestern states. Bill Reed, the owner of CFC, was hoping to develop an improved method of forecasting the demand fort he company’s products because he believed that more accurate forecast would help improve the efficiency of the company’s purchasing, production, and inventory operations.

At one time most of the beef cattle consumed in the United States were grass-fed on open range, ranches, and farms. Over the last 25-30 years the fattening of beef cattle had shifted to feedlots and farms. In late summer of each year farmers and feedlot operators bought yearling calves weighting approximately 600 pounds each. These were fattened on processed feed which was purchased from companies such as CFC. Typically, farmers and feedlot operators fattened their calves until they weighed about 1,000 pounds apiece, a process that usually took place through the winter and lasted until May or June. Then the cattle were sold to meatpackers for slaughter. This was the source of corn fed beef, so highly acclaimed in restaurants.

Historically, beef has been the preferred source of protein by US consumers. Total beef production grew from 9 million pounds in 1950 to approximately