Article ID: | iaor20002642 |
Country: | United States |
Volume: | 44 |
Issue: | 1 |
Start Page Number: | 87 |
End Page Number: | 99 |
Publication Date: | Jan 1996 |
Journal: | Operations Research |
Authors: | Fisher M., Raman A. |
Keywords: | scheduling |
Traditionally, fashion products have incurred high losses due to stockouts and inventory obsolence because long lead times coupled with a concentrated selling season force all or at least most production to be committed before demand information is available. Under a Quick Response system, lead times are shortened sufficiently to allow a greater portion of production to be scheduled in response to initial demand. We model and analyze the decisions required under Quick Response and give a method for estimating the demand probability distributions needed in our model. We applied these procedures with a major fashion skiwear firm and found that cost relative to the current informal response system was reduced by enough to increase profits by 60%. Relative to the cost that would have been incurred if no response were used, optimized response reduces cost by enough to roughly quadruple profits.