MKT $364$ Operations Management

Case #$5$ Inventory Management

Background

Zhou Bicycle Company $($ZBC$),$ located in Seattle, is a wholesale distributor of bicycles and bicycle parts. Formed in $1981$ by University of Washington Professor Yong$-$Pin Zhou, the firm$$s primary retail outlets are located within a $400-$mile radius of the distribution center. These retail outlets receive the order from ZBC within $2$ days after notifying the distribution center, provided that the stock is available. However, if an order is not fulfilled by the company, no backorder is placed; the retailers arrange to get their shipment from other distributors, and ZBC loses that amount of business.