A Better Way to Match Supply and Demand in the Retail Supply Chain
“The ongoing supply chain crisis threatens the success of retailers and their suppliers because its volatility makes both overstocks (having something customers don’t want) and stockouts (running out of the items they desire) more likely. And the stakes are high: Stockouts can cost retailers their total gross margin. Overstocks, if they are lucky, cost retailers 50% of their gross margins but more likely, all the margins.
A methodology we call flow-casting offers a way to escape the drag on profits of overstocks and stockouts. Flow-casting is…”