Hightower Department Stores: Imported Stuffed Animals Essay

978 Words Feb 20th, 2016 4 Pages
Hightower Department Stores: Imported Stuffed Animals
Executive Summary
On the morning of January 17, 1993, before the annual buying trip to Germany for the 1993 Christmas season, the toy buyer for the chain of Hightower Department Stores named Julia Brown was reviewing the performance of some models of stuffed animals tested for sales during 1992. Every time Julia’s on the trip, she would buy some stuffed animals for testing. Fifty was the minimum amount the manufacturers require. Based on Julia’s years of buying experience, the tested result would give Julia a clear estimation about how many new stuffed animals she needed to order. Figure 1 in below shows the timeline of how Julia buys the toys for the company: 1992
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The imported stuffed animals were just in accordance with Julia’s strategies.
The strategies had given the company an advantage that about half of its toys are imported while other mass merchants and toy supermarkets only had less than 20 percent of imported toys.
Possible Decision Alternatives and Evaluations
According to the decision problem session, three simple decision trees could be developed:

Julia’s alternatives are either buying toys from domestic manufacturers, or importing from foreign countries. Buying from domestic could at least gave $1150 contribution while the contribution of selling imported toys depended on each different results from test sales. The result of tested sales seemed to be a good indicator of realized sales, thus linear regression was calculated according to the test sales and realized sales (excluding those which were not adopted):
Year
Animal
Landed Cost ($)
Retail Price ($)
Sales Projection
Test Sales
Realized Sales
1981
Ape
2.33
4.95
260
27
304
1982
Bear
3.15
5.95
280
19
374
1982
Dragon
2.52

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