Clutario,Ignacio Luis P.

Date: May 13, 2022

BSBA OM I401

Analyze and describe the economic requirement/s that could have influenced the major problem in
the given case study.

In the case of H&M, it needs to store an adequate amount of raw materials in its warehouse to ensure
that it has the capability to have continuous production. As the brand’s selling point is affordable
clothings for men, women, teenagers, and children, in relation to continuous production H&M is
required to have a strategic plan on price stabilization in order to keep the demand and supply balanced
and the price will be justifiable to their brand’s selling point. It also needs to address the logistics
strategy of H&M as mentioned in the case they are opened 290 stores across the globe, with that they
also need to enhance their quick supply capability therefore they need to have a strategic location of
new warehouses so that the production and delivery of finish product will be easier.

Recommend the appropriate type/s of warehouse/s that will help H&M better manage their excess
inventories.

Factory warehouse H&M can exploit this kind of warehousing so that it can produce an accurate amount
required in certain geographical locations, it mentioned in the case that H&M moved excess garments to
other locations where they have greater demand, to eliminate that process they can set up a regional
factory warehouse to produce the required quantity of product in those areas.

Identify and describe the economic benefit of warehousing which may leverage H&M’s sales.

Cost-effectiveness, H&M can eliminate some process of transferring goods to one place over another,
thru setting up strategic factory locations they can lessen the transportation cost of their product, less
cost can cause greater income.

Accumulation, it enable H&M to advanced placement of inventories to markets with constant

fluctuating demand.