s (unless there are other situational evidences that such a shift in strategy would be a good idea; see the first recommendation). And likewise, if your strategy is to compete by differentiating your product form every other product, do not deviate form that strategy (Crawford, p. 222). Thirdly, and most importantly, forecast what you know (Crawford, p. 221). This can be subdivided into two separate guidelines. The first guideline is that a forecast should always be accompanied by a sensitivity analysis. A spreadsheet can be filled with a range of values to give you a broad spectrum of results. If failure is unlikely then proceed. The second guideline is, dont forecast unless you have to. Oftentimes there is no reason to forecast because the market provides you with all the needed data. If the data were simply asked for by one party or made available by the other, there would be no need to forecast. This is often the situation that can be found in a supplier-retailer relationship.1.3 QUANTIFIABLE SUPPLY CHAIN EXAMPLEEven when attempts are made to follow the afore mentioned guidelines there will still be many times where it will be necessary for a company to forecast the future. One such situation can be found in a simple two-tier supply chain. The following example will be a description of the relationship between a small karate studio franchise and the main Orem karate studio.A wise man once said, "In order to fix a problem you first understand the process." In Figure 1, you will find a flow chart of the situation to be examined in the following paragraphs. The blue lines represent the flow of information, and the red lines represent the flow of physical goods (belts in this example). In the example, the market will dictate demand; the small franchise will attempt to predict that demand and the Orem studio will supply the goods. The small franchise is the first tier and the Orem studio is the second. The belt manufact...
