Due to a combination of an increase in costs and declining revenues, Four Star, a mattress
manufacturer in Singapore, has suffered from a stagnation and decline in its overall profits. The
increased competition in the mattress market in Singapore resulted in a proliferation of product
offerings for all the manufacturers. Large dealers demanded more exclusive products in order to
have competitive advantages, so the number of mattress models manufactured by Four Stars
increased 18-fold from 1997 to 2002 (they introduced 30-60 new models each year). Typically,
the large dealers were known to keep inventories of mattresses in their warehouses to manage to
unpredictable changes in demand. By 2002, these large dealers started to change their processes
and expected manufacturers to deliver their products to the customers directly. These factors
have significantly increased the unpredictability in demand for Four Star, making their
production scheduling much more complex.
