Zara is a fashion label and fashion chain store established in 1975 by the Spanish group Inditex owned by Amancio Ortega. Zara tripled its profit and stores during the last two decades and ranked the third biggest retailer worldwide (Zhang, 2008). Zara has been struggling with managing inventories accumulated because its retail outlets are accumulating the demand and leading to inaccurate demand forecast orders. Zara also has a free return policy allowing customers to overstate demands due to shortages intentionally and then cancel when the supply becomes adequate again. b) Advise how Zara can resolve the inventory accumulation problem in its supply chain?

Zara is a fashion label and fashion chain store established in 1975 by the Spanish group Inditex owned by Amancio Ortega. Zara tripled its profit and stores during the last two decades and ranked the third biggest retailer worldwide (Zhang, 2008). Zara has been struggling with managing inventories accumulated because its retail outlets are accumulating the demand and leading to inaccurate demand forecast orders. Zara also has a free return policy allowing customers to overstate demands due to shortages intentionally and then cancel when the supply becomes adequate again. b) Advise how Zara can resolve the inventory accumulation problem in its supply chain?

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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Zara is a fashion label and fashion chain store established in 1975 by the Spanish group Inditex owned by Amancio Ortega. Zara tripled its profit and stores during the last two decades and ranked the third biggest retailer worldwide (Zhang, 2008). Zara has been struggling with managing inventories accumulated because its retail outlets are accumulating the demand and leading to inaccurate demand forecast orders. Zara also has a free return policy allowing customers to overstate demands due to shortages intentionally and then cancel when the supply becomes adequate again. a) Identify and discuss the supply chain term associated with Zara's inventory accumulation problem in the supply chain?
ABC Corporation is a large manufacturing company that has been using an outdated inventory management system for the past 10 years. The system has become slow and unreliable, causing delays in production and shipping. The IT department has recommended replacing the system with a modern cloud-based solution that can be accessed from anywhere and has the potential to integrate with other business systems.After a thorough evaluation of several vendors and their products, the IT team has recommended the purchase of a system called "InventoryPro". The system has a user-friendly interface, robust reporting capabilities, and is scalable to accommodate future growth.The CEO has approved the project, and the IT team has started working on the implementation plan. The project team includes a project manager, business analyst, database administrator, software developer, and testing specialist.As part of the project plan, the team will need to migrate the data from the old system to the new one,…
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Assessment of Inventory Management Practices in the Construction Industry in the Philippines-by Ma. Remedios F. Mendoza and Renato B. Garbo Jr. The Application of Automated Inventory Management System in the Construction Industry in the Philippines- by Alvin C. Custodio and Reynaldo B. Hizon Jr. Digital Inventory Management System for Construction Materials in the Philippines- by Anfernee Jade C. Herrera and Ernesto C. Enriquez. An Analysis of Inventory Management Practices in the Philippine Construction Industry- by Ricardo C. Reyes and Michelle P. Vasquez. Evaluation of Inventory Management Practices in the Construction Industry in the Philippines: A Case Study- by Jomar P. Albao and Albert M. Ramos. Inventory Management Practices in Construction Firms in the Philippines- by Jasmin A. Sison and Jocelyn A. Valiente. The Role of Digitalization in Inventory Management in the Philippine Construction Industry- by Ariel T. Dignadice and Marcelino P. Fabros Jr. An Assessment…
Investigate how demand variability affects the overall effectiveness of the Wilson approach in inventory management.
Suppose you have been employed by Kam Steels Corporation as a financial manager. You want to change old inventory ordering system to the just-in-time inventory method. The shareholders and the CEO of the firm would like to know how the new would operate and the benefits and disadvantages of the just-in-time inventory method. By providing a high-quality argument, please explain how the new would operate and its benefits and disadvantages to the shareholders and the CEO of the firm.
Evaluate how demand variability impacts the effectiveness of the Wilson approach in inventory management.
Alina Limited is a manufacturer of widgets orders components for use in manufacturing. The estimated demand for the components during the coming year is 15,000. Order costs are $100 per order; carrying costs are $12 per component. Using the economic order quantity model What is Alina Ltd’s optimum order quantity? If the supplier guarantees a three (3) day delivery on any order that is placed, What is the re-order point?
Using excel. The Metropolitan Bus Company (MBC) purchases diesel fuel from AmericanPetroleum Supply. In addition to the fuel cost, American PetroleumSupply charges MBC $250 per order to cover the expenses of deliveringand transferring the fuel to MBC’s storage tanks. The lead time for anew shipment from American Petroleum is 10 days; the cost of holding agallon of fuel in the storage tanks is $0.04 per month, or $0.48 peryear; and annual fuel usage is 150,000 gallons. MBC buses operate 300days a year.a.What is the optimal order quantity for MBC?b.Howfrequently should MBC order to replenish the gasoline supply?c.TheMBC storage tanks have a capacity of 15,000 gallons. ShouldMBC consider expanding the capacity of its storage tanks?d.What isthe reorder point?
Identify the two basic decisions addressed by inventorymanagement and discuss why the responses to these decisions differ for continuous and periodic inventory systems
Discuss customer service level for an inventory systemwithin the context of quality management.
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