PURPOSE

The purpose of this assignment is to develop learner's ability to answer several questions based on a real

case study of Production and Operation Management.

REQUIREMENT

How Chinese Lingerie Retailers Manage Inventory

In the cut$-$throat fashion industry, many companies have to lift up

their collection renewal rate to catch up with the current trends in

the market. However, the high renewal and restock rate may cer$-$

tainly arise some inventory problems.

In fact, many Chinese apparel and lingerie companies have got

entangle with this problems for a long time. But most of them are

still on the way to improve and finding better solutions...

The Current situation of China's Inventory

Problems

Many lingerie companies and retailers in China have complained

that the poor inventory management has raised the cost of their

business. And an excess of inventory overstock have made their

business hard to move forward. Most of these are usually due to $3$

problems below.

Firstly, retailers find it hard to predict the market and fail to

balance the demand and supply. As a matter of fact, lingerie is

a fashion business with very unpredictable demand. If they over

optimistic about the market's enthusiasm for a certain kind of prod$-$

uct, they will definitely invested a lot of inventory that had to be

disposed off at heavy reduced price because of lack of demand.

On the other hand, if they fail to maintain adequate volume and

management knowledge. As a result, their subordinate probably

cannot receive adequate trainings from them and make a poor

performance.

Development of Inventory Management in lingerie

industry in China

The concept of Inventory Management

To better manage inventory, we should firstly know what inventory

management is$.$ Here we give out a brief description of the inven$-$

tory management's basic concepts. There are four main types of

firm's inventory, according to Heizer and Render $2001$: raw mate$-$

rial inventory, work$-$in$-$process inventory, inventories which are

devoted to maintenance, repair and operating, as well as finished

goods inventory.

In the manufacturing process, lingerie companies should

maintain raw materials like cotton to prevent supplier vari$-$

ability in price, quality, quantity and delivery time.

The unfinished items should be under the control of work$-$in$-$

process inventory processed inside the lingerie firms. It is a

process that unfinished items are either being fabricated or