This model has direct application in H&M's retail stores where it sells its products to consumers. H&M's corporate buyers in Sweden actively manage its inventory, researching itemized sales reports by country, store, and, most importantly, type of merchandise daily (Capell, 2002). The buyers use this information to reallocate production or shipments, reducing potential overstock problems. The itemized reports also allow buyers to maintain a high level of turnover, keeping apparel on the sales floor up to date.
Enhancing the company's competitive advantage in this area, the integrated direct distribution channel ensures that H&M stores receive new shipments daily, giving the company further control over responses to supply and demand shifts (Capell, 2002). The company estimates that each store receives between 500 and 1,000 new items daily, with total sales of over 550 million items annually company-wide.…
