Sales Office Orders

This is a very important decision variable which must be used to obtain goods for your firm's sales offices to sell.  If a sales office does not place an order with your firm's headquarters, it will only be able to sell the stock it has on hand in inventory.  The product is not shipped to an area unless an order is placed by a sales office.  The only exception is for a sales office in an area which also has a producing plant.  The sales office may obtain additional stock from the plant in its area if the plant still has inventory remaining after filling all of the sales orders from the other sales offices.

IMPORTANT NOTE: Customer orders refer to the actual customer demand by market intermediaries (wholesalers, large retailers, etc.) for your product in each market area.  They are the orders which your customers place with your sales offices for the purchase of your product.  Your firm does not sell to the end consumer.

The sales office in each area must submit an order to your firm's headquarters each quarter. Your firm (by way of the BPG computer program) will then determine how many units of product are shipped and from what locations, according to a pre-approved policy.  Units not sold during the quarter in which they are purchased will be placed in inventory.  Inventory carried over from one quarter to the next by a sales office is stored in a public warehouse.  Sales offices in an area which also has a manufacturing plant may store up to 300,000 units in the plant's warehouse facility.

Your firm has developed a set of policies to guide product allocation.  The allocation priorities are as follows:

1.  Goods held in inventory by a sales office will not be shipped to another area or country but will be held for sale in the area where they already are located.  They have been produced according to product specifications for that market area.

2.  If a plant's production exceeds the number of units in the local sales office order, the excess production will be made available for shipment to other area sales offices after the local sales office order has been completely filled (not customer orders).  In other words, sales offices in producing areas are given priority and will have their total order filled (given sufficient production in the area), even if there is not enough production to fill orders of other sales offices.

3.  Sales office orders will be filled only from your firm's current-quarter production.  Shipments will be allocated to fill all existing sales office orders if production is sufficient.  These shipments include those to all sales offices, both in areas with manufacturing plants and in areas without a plant.  If customer orders exceed a sales office's inventory in an area with an operating plant, any unallocated units remaining at the plant will be used to fill the additional customer orders.  For sales offices in producing areas, "shipment" consists of setting goods aside in the warehouse area of the plant for sale to local area customers.

4.  If an area's production is less than the local sales office order, the shortage will be entered in a request for shipment from a plant in another area (if there is one).

5.  Then, goods available for shipment from all plants are matched with unfilled sales office orders from all areas.  If goods available for shipment equal or exceed orders from sales offices in non-producing areas plus unfilled orders from areas producing less than their sales office has ordered, all orders are filled.  Otherwise, they are pro-rated according to the size of the orders.

6.  If goods are available for shipment from more than one plant, sales office orders are filled first from non-home area plants beginning with N/P/S, then from domestic non-home areas and finally from the home area.

The bottom line is that the sales office in each market area must manage its own inventory.  Failing to do so may result in stockouts even though other areas have inventory left over.

Limits:  0 to 999 (in thousands of units)