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Inventory Strategy

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If I were a buyer for a large chain of music stores that sell collector albums of bands such as the Beatles. The Beatles have always been popular and their CD sales have always been consistent. In fact the younger generation has rediscovered the Beatles with a zeal not seen since the 1960s. I see the prices of CDs increase with every order and it is almost impossible to keep some of the collector editions in stock. However some of the less popular titles are not receiving many buyers although these sold better in the 60s than they do now. My boss is unhappy about the shelf space the unsold items are using and the potential sales he/she is losing. An important concern is that the holiday season is approaching and he/she does not want to lose any sales.

How would I go about identifying the inventory issues that relate to these problems? Evaluate how improving some steps in the merchandising plan could help minimize these problems? What will I tell my boss that will ease the problem and remove the blame from my shoulders? What plan of action to address these issues and better manage the inventory?

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How would I go about identifying the inventory issues that relate to these problems?

-The inventory issues stem from ordering too much of a product that isn't selling. Though other 60's music might be making a revival, perhaps not all genres are doing the same. Asking the retailer to have their employees take a numerical inventory of the remaining number of the titles that are not moving off the shelves will give you an idea of how much stagnant inventory you have within the stores. From there, you could do suggest a focus group with the age group that is being targeted and find out from them why the CDs are not selling. This may allow you and the retailer to target your marketing strategies differently moving forward.

Evaluate how improving some steps in the merchandising plan could help minimize these problems?
The eight ...

Solution Summary

Addresses inventory issues, evaluates how to improve merchandising plans and plans of action to address future issues. Over 508 words, 1 reference.

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Consider a manager developing a logistics strategy.

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a.Employ internal logistics expertise.
b.Acquire a company with this expertise.
c.Develop a strategy, and then employ specific suppliers to carry out well-defined portions of the strategy.
d.Develop the strategy with a third-party logistics provider
2.Why is the third-party logistics industry growing so rapidly?
3.There are three types of retailer supplier partnerships: quick response, continuous replenishment, and vendor-managed inventory (VMI). For each type, discuss situations where that type would be preferred over the other two. For instance, compare quick response to continuous replenishment: under what conditions is one preferred over the other?
4.Consider the quick response partnership. Suppose the retailer places an order at the beginning of each month but transfers POS data to the supplier every week. What is the impact of the manufacturer's weekly production capacity on the benefit from beneficial: high weekly production capacity or low capacity? How should the supplier use the weekly demand data received from the retailer?
5.Discuss the various possibilities for inventory ownership policies in a VMI arrangement. What are the advantages and disadvantages of each of these policies?
6.Recall Example 8-13, the story of Spartan Stores' failed VMI effort. Discuss how Spartan might have done things differently in order to help the program succeed.

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