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Barilla has been facing huge variability in demand which is straining the manufacturing and distribution network of the company. This fluctuation in demand, the two week limit on inventory from the distributor’s end and the difficulty of the manufacturing process to deal with fast-track orders are forcing the CDCs to maintain a higher level of inventory. This increases costs associated with holding inventory. Uncertainty in demand also upsets the production schedule which may lead to overtime shifts in order to meet the demand, higher inventory of raw materials and frequent capacity adjustments, which all increase the overall cost of the product. Frequent capacity adjustments and high raw material inventory may also lead to quality problems. Further, the difficulty in speeding up the manufacturing process to meet with fluctuating demand coupled with this uncertainty in demand will increase the lead time for customer orders which in turn may lead to stock outs at the customer end.......

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Approximate Word Count: 1005
Approximate Pages: 5 (250 words per double-spaced page)

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