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Keeping Stock: BMC's Failed Expansion in Australia
Case Study Questions
1. What could Carl and his team have done differently about BMC's inventory management challenges?
2. Describe the advantages and disadvantages of a large retailer using inventory management software systems, such as BMC's use of ARP.
3. One of the inventory management strategies used by BMC was to base inventory levels on forecasts. What alternative strategy would you have recommended to Carl and his team?
Forecasts are educated guesses; when used for a period even up to a year, they can be highly inaccurate. Using forecasts along with customer demand is a better way to maintain inventory levels.
This will help align inventory levels with the items customers are purchasing.
Having a rapid replenishment strategy to react to demand signals quickly and efficiently (requiring connectivity with the suppliers and freight forwarders) is the best way to respond to an unforecastable launch.
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