Bus740DB2

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Feb 20, 2024

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1. Given the uncertainty associated with player demand, how should Reebok approach inventory planning for NFL replica jerseys? Given the nature of professional sports, in particular the NFL and the uncertainty associated with player retention or jersey demand, utilizing demand forecasting can become rather difficult for Reebok. As stated in the Simchi-Levi et al text (2020), Reebok’s demand forecasting generally includes factors such as past sales, team/player performance, market intelligence, advanced orders, and informed guesses. To mitigate these issues, Reebok should look to shorten the time included in their demand forecast. As stated by Maab et al. (2014), “The short-term demand forecast is used for distributing the products from the central warehouse to the outlets in the most profitable way, but not for determining the optimal buying quantity.” For example, if they were to follow the fiscal quarters and forecast for each separate, they could account for increased demand prior to the season starting or during playoffs and during the offseason where players often change teams. Along with shortening the time frame for their demand forecast, Reebok should also look to make sales in advance of the season, meaning allowing fans to purchase any time during the off-season with the exception that the jersey will not be delivered until the season begins. Although will result in extended wait times for customers, they essentially create a larger demand for “hot items.” Lastly, Reebok can also look to offer customizable jerseys on demand. In this business model, Reebok would increase their utilization of their blank jerseys throughout the year. This will allow a customer to purchase any jersey of any player, any time they wished to without the concerns of excess inventory. 2. What should Reebok’s goal be? Should Reebok minimize inventory at the end of the season? Or maximize profits? Can Reebok achieve both? What service level should Reebok provide to its customers? Reebok’s goal should emphasize maximizing their profits as opposed to minimizing their inventory at the end of the season. If the focus is placed on minimizing inventory, Reebok become vulnerable to having negative impacts on both their service level and their overall profitability. As stated by Xiao and Xu (2013), “Service level influences the purchase choice of consumer. A higher service level attracts more consumers to buy the products. However, increasing service level incurs a higher service cost.” Although decreased inventory has benefits such as decreased holding costs, if Reebok were to focus their efforts on reducing their inventory, they run the risk of delayed shipments and inability to meet their customer demands for the following season. Achieving both is possible but would likely be difficult given the constantly changing needs of their customers. To achieve this, Reebok must develop more accurate forecasting models which allow for excess inventory to be kept at a minimum. Cloud- based forecasting tools, such as Celect, Inc., allow for organizations to generate forecast demands by optimizing inventories with “hyper-local” demand prediction about consumers will buy. (Biswas, 2020). Ideally, Rebook would function at a high service level given the targeted customer base ordering jerseys, however they should not reach a point where they diminish returns. References

Maaß, D., Spruit, M., & de Waal, P. (2014). Improving short-term demand forecasting for short- lifecycle consumer products with data mining techniques. Decision analytics , 1 (1), 1-17. Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2021). Designing and Managing the Supply Chain: Concepts, Strategies and Case Studies (4th ed.). New York, NY: Richard D. Irwin, Inc. ISBN: 9780073403366. Xiao, T., & Xu, T. (2013). Coordinating price and service level decisions for a supply chain with deteriorating item under vendor managed inventory. International Journal of Production Economics , 145 (2), 743-752.

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