(3 pages of text)
This case investigates issues of obsolescence and inventory control in a local sportswear company that is competing on the global stage with both multinational corporations and foreign, low-cost distributors. Athletic Knit, a family-owned company in Toronto, faces the need to balance peak-season demand during the third quarter of the year with the available knitting production capacity. Inventory, if it serves a purpose, can be an asset to a company, but too much inventory can be a liability. Trade-offs between capacity, inventory, and flexibility to meet custom orders must be met to support corporate strategy. Given the competitive nature of the industry, tighter inventory controls are essential, but the company must weigh endangering its reputation for fast responses to custom orders with managing inventory to prevent stock-outs and/or overruns of stock that cannot be sold.
This case is ideally suited for an MBA course in operations management or a senior-level undergraduate class. Students will have to:
- Address seasonal aggregate planning and inventory analysis.
- Discover the limits of economic order quantity.
- Trade off the cost of capacity versus inventory.
Arts, Entertainment, Sports and Recreation
Canada, Small, 2011
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