Supply Chain Demand Forecast And Inventory Control

During the recent twenty years, domestic apparel and footwear industryhave undergone fast development. The enterprises’ operation model wentthrough four stages development from products operation, brand operation,capital operation to resources operation. The scales of the enterprisesexpanded rapidly. As China joined the WTO in late2001, a large number offoreign apparel and footwear companies entered China market throughvarious investment forms. This has seen a surge in products supply. On theside of customers, the differences of consumption concept and habits madethe individual needs become more and more popular. Under this background,domestic apparel and footwear companies has to face more difficult andsevere problem about excessive inventory.How to reduce the excessive inventory has already become the mosturgent problem for many apparel and footwear companies. This thesisfollows this direction, and proposes relevant solutions from the demandforecast perspective.This thesis adopts literature research and interview method tosummarize the factors which have impact on sales quantity of fashion appareland footwear. Through the cluster analysis, it makes an exploratory analysisof sample data which comes from a domestic large footwear company. Theresearch shows that the products can be divided into four categories according to sales quantity, VIPs purchase behavior etc.Then, it uses regression and bass model analysis to build sales forecastmodel and point out that VIPs purchase behavior is one of the most importantfactors which exert significant influence on sales quantity. Their opinionswill affect others’ purchase decision greatly.Finally, by analyzing the sales and inventory trends of the fourcategories, this thesis finds out that sales quantity and sales fluctuation aswell as the reason of inventory risk varies from category to category. For thecategories of dogs and question marks, the gap between order and salesresults in excessive inventory. However, for the categories of cash cows andstars, the reason is large replenishment without a plan. Based on this result,this thesis brings up an idea that the integration and application of promotionand replenishment strategies will improve the problem of excessive inventoryto a large extent.Take an example of the category of question marks, working out somepromotion strategies for the VIPs in advance will increase the possibility ofraising sales quantity and reducing inventory. Moreover, if positive word ofmouth is brought by VIPs constantly, part of the products may transfer fromthe question marks category to stars category. At that time, operation staffsshould pay more attention to replenishment strategies and make efforts todecrease the profit loss caused by losing the sales opportunity.From the research results, the inventory strategy of concurrent controlhas significant advantage over post control. It will have positive effect onreducing inventory and improving performance for fashion enterprises.