Question

1. List five tactics that retailers can use to reduce their inventory levels while keeping the chance of stockouts low. (5 marks)

2. What are the dangers of frequent small orders and the use of emergency shipments as a means of reducing inventory requirements? (5 marks)

3. How could have Wal-Mart have foreseen and avoided the negative impact on revenues of pruning its merchandise selection? (5 marks)

Answer 1

1 Five tactics of retailers to reduce inventory levels at the chance of low stock out:

• Emergency shipments

• Reduction of slow selling inventory

• Web and store inventories in a single facility

• Fast delivery schedule for resellers to purchase goods

• Decrease the number of brands on slow selling merchandise. Manufacturers and wholesalers impose high inventory levels.

• Domestic suppliers quickly deliver schedules for imported merchandise

. • Store ready merchandise inventory planning on response to attain deliveries frequently

• Stock slow selling commodities in the distribution center on daily basis to ship individual stores

• Customers view inventory on chain stores, reserve merchandise, and pick at stocked store.

2. Dangers of small orders to use emergency shipments for reducing inventory requirements:

• Orders are small but are made frequently due to less discounts and extra shipping charges

. • Emergency shipments are costly for special deliveries.

• Poor inventory planning is useful for key customer content.

3 Negative impact on revenues pruning merchandise selection of W:

• Examining database of customer to view brands purchased by key consumers.

• Conduct market research amongst consumers to determine products with extreme brand loyalty.

• Low-inventory turnover merchandise selling online versus removal from sales venues

• Acceptable alternatives for products eliminated • Version of brand and product no longer will be stocked