Essay heading: "L.L. Bean, Inc." Case Study Report

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May 28, 2007






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At the item level, forecasts have to be issued and ultimately purchase commitments have to be made. Problem: the large number of errors (either over stock or under stock) at the item level is disturbing to top management. Estimated costs of lost sales and backorders is about $11 million dollars, and liquidation costs associated with having too much of the wrong inventory is an additional $10 million totaling $21 million or 4% of catalog sales...
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The item forecast process involves a group of four to five individuals that include inventory buyers and product people and was typically accomplished by: a. Rank various items in terms of expected dollar sales b. Assign actual dollar values according to item ranking on excel spreadsheet i. This could result in discussions, arguments, and complaints among the group members c...
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