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Case
| HBS Case Collection
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1993
(Revised from original 1992 version)
L.L. Bean, Inc.: Item Forecasting and Inventory Management
by
Arthur Schleifer Jr.
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Abstract
L.L. Bean must make stocking decisions on thousands of items sold through its catalogs. In many cases, orders must be placed with vendors twelve or more weeks before a catalog lands on a customer's doorstep, and commitments cannot be changed thereafter. As a result, L.L. Bean suffers annual losses of over $20 million due to stockouts or liquidations of excess inventory. Provides a context in which buying decisions that balance costs of overstocking and understocking when demand is uncertain are made and implemented on a routine basis.
Keywords: Forecasting and Prediction;
Risk Management;
Cost Management;
Risk and Uncertainty;
Demand and Consumers;
Order Taking and Fulfillment;
Retail Industry;
United States;