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Replenishment in pre-defined assortments is the bane of fashion industry.
Fashion industry is known to suffer from chronic stockouts and obsolescence. The reason is often attributed to uncertainty in demand, which is true. However, the inventory mismatch is further accentuated by the industry’s unique practice of replenishing in pre-defined sets of various sizes.
Actual demand of various sizes is bound to be different from the marketers’ estimate. If we keep replenishing in pre-defined sets, we are replenishing more of non-selling sizes and under-supplying fast-selling ones.
How do we correct it?
The replenishment should ideally be done in individual sizes. Supply chains should gear themselves to respond to what the individual stores are selling rather than imposing their pre-defined sets on them.