Zara is a fashion label and fashion chain store established in 1975 by the Spanish group Inditex owned by Amancio Ortega. Zara tripled its profit and stores during the last two decades and ranked the third biggest retailer worldwide (Zhang, 2008). Zara has been struggling with managing inventories accumulated because its retail outlets are accumulating the demand and leading to inaccurate demand forecast orders. Zara also has a free return policy allowing customers to overstate demands due to shortages intentionally and then cancel when the supply becomes adequate again. a) Identify and discuss the supply chain term associated with Zara's inventory accumulation problem in the supply chain? 15 Marks b) Advise how Zara can resolve the inventory accumulation problem in its supply chain?10 Marks
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Zara is a fashion label and fashion chain store established in 1975 by the Spanish group Inditex owned by Amancio Ortega. Zara tripled its profit and stores during the last two decades and ranked the third biggest retailer worldwide (Zhang, 2008). Zara has been struggling with managing inventories accumulated because its retail outlets are accumulating the demand and leading to inaccurate demand forecast orders. Zara also has a free return policy allowing customers to overstate demands due to shortages intentionally and then cancel when the supply becomes adequate again.
a) Identify and discuss the supply chain term associated with Zara's inventory accumulation problem in the supply chain? 15 Marks
b) Advise how Zara can resolve the inventory accumulation problem in its supply chain?10 Marks
