OIDD 101 Lecture Notes - Lecture 7: Profit Margin, Stuffed Toy, Toy Model
26 Mar 2015
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Document Summary
Opim 101 - operations & information management - lecture 7: modeling business. Huge company - 1800 stores around the world but only 2 warehouses in spain. Everything separated into two types of sizes - major and minor sizes. They pull items when one of the major sizes is sold out. On a weekly basis, each store receives a list of retail articles available to be ordered from warehouses ( offer ) Based on inventory available and sales projections, store manager places an order for each article-size combination. Warehouse team aggregates and modifies store requests to match the available inventory. Process designed for small distribution network -- not fit for scaling up. Over-ordering : store managers are compensated and promoted based on total sales in their store. Multiple tasks competing for store managers" attention. On the warehouse side, the process is manual and is difficult to scale up : Decisions: weekly shipments of each article-size to each store.
