Inventory Management 1.

Zara follows a very agile true JIT inventory

system and deliveries happen every 2weeks.
Assortment
Decisions 2. Its inventory system is influenced by the pull of
Store
Post Sale the customer instead of a push from the designer.
Manager
I/P
Data
3. Three Strategic objectives
Forecasting a) Reduce lead times by creating a dynamic
Model response system .They have tight control over the
design and manufacturing process .Strategic
agreements with local manufacturers for cutting,
Demand
Forecasts
dyeing and sewing and also acquire fabric in 4
Inventory Warehouse colors.
Inventory
in Stores b) Decrease the quantities produced to decrease
the risk of outdating.
Optimizing
Process c) Increase the available variety to maximize the
spread-Design changes are decided after the
season has started as a response to actual sales
information which eases the matching of supply
and demand. The company takes nearly 4-5
weeks to design a new product and get it to the
Distribution of Inventory

1) The Distribution Process consists of using the shipment requests from

store managers(based on a subset of data available in the warehouse)
along with past historical sales to build demand forecasts. It then uses
these forecasts, the inventory of each article and size remaining both in
the warehouse and each store, and the assortment decisions as inputs
to an optimization model having shipment quantities as its main
decision variables to ship the shipment at various stores.
2) Distribution process could be further improved in the future by
introducing explicit incentives for the stores to contribute accurate.