Inventory and Forecast

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3. Based on the description in the text and the evidence in the Exhibits 6 and 9, what went wrong with the SF-6000 forecast?
Launching the first 8 megapixel sensor and 10x zoom camera on the market was a big accomplishment for Leitax. On their official press release, the SF-6000 was named as an "a tool for serious photographers". There were huge expectations about the product and everyone at the company was pretty excited about it. Their biggest challenge was the forecast for a new product with huge expectations and great reviews. It was no easy task given all the parts involved were blinded by excitement, and according to their new model of forecast, the final number should be a consensus between all the interested functions.

Leitax made a classical error by approving a boosted final forecast number, even though science was running 30% lower than overall final proposed consensus number for SP-6000. Driven by incitement, no one seemed to worry about the statistical forecast which provided a reference point for the other forecasts. On the process, it is stated that any high deviation should be investigated but it does not seem to be the case for this camera's forecast.

By analyzing the data provided on exhibit 6, it is easy to see how sales and top down were clearly boosted. Looking from a regions perspective, all approved final numbers across the regions were higher than the statistical model predicted with the exception of Latin America, where the opposite happens. It could be speculated that sales head was not very familiar or did not have much knowledge regarding reviews or consumer expectation on the specific region and since account managers were excluded of this process, forecast seemed to be very conservative and as a result, final numbers were closer to the actuals. However, there is not enough data to draw any conclusion since none of the regions had inputs from account managers at any point of the process and it is no known if manager was...
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