There are several issues related to inventory management and forecasting at the Exchange. Manual data entry into the warehouse management system leads to many errors in expiration dates. There is no standard for barcodes with expiration information. Buyers forecast based on historic data and inventory levels, which can be incorrect. The Exchange struggles to meet demand for popular high turnover items. Seasonal items have long lead times but demand is difficult to forecast accurately, resulting in excess inventory, spoilage, and shortages. The warehouse space is not utilized efficiently due to excess inventory.

1. 125 Buyers tend
to order more
than expected
demand
116 Expiration
dates must be
interpreted by
employees
111 There are
discrepancies in
determining
expiration dates on
received goods
117 Data is entered
into warehouse
management
system manually
122 Buyers forecast
based on incorrect
historic data
UDE #5
UDE #5
121 There is a large
number of mistakes
related to expiration
dates
t
118 Increased error
with manually
entered data
112 There is no
vendor standard in
recording
expiration dates on
goods
105 There is no federal law
requiring NAICS to have
standardized Bar Code
Labeling system for
expiration dates
106 NAICS does not have a
standardized barcode for
expiration information
(C) To Page 2
1
(E) To Page 3
123 Buyers forecast
based on current
inventory levels
104 The Exchange is a
organization governed by
federal laws
120 The Exchange
has inventory
shortages for
products with high
demand
124 The buyers
over-react to
shortages
119 Popular items are shipped
immediately upon arrival
115 There are
not enough
popular items to
allocate to
retailers
114 The exchange
cross-docks a large
percentage of high
demand items
received
110 The Exchange
does not meet
popular item
demand
113 Cross-dock is
the quickest
method to
replenish retail
stock
108 Retailers tend
to over-order when
there is
uncertainty for
future shipments
109 Retailers demand
items faster than the
DC can deliver
102 Retailers do
not receive
shipments often
107 Buyers do not
purchase enough
items demanded
103 Forecasting
is inaccurate
*NAICS - North American Industry Classification System
101 Retailers
have high
velocity of sales

2. 209 The Exchange
holds the current
policy to discount
excessive goods
210 Warehouse
wants to move
over bought
goods
UDE #7
212 The warehouse
has large percentage of
products discounted
211 Goods are put
on promotion to
stimulate demand
UDE #6
208 There is excessive
money tied up in
inventory
204 There is a over stock of
goods in the warehouse
206 The warehouse space is
not utilized efficiently
(C) From
Page 1
207 Warehouse throughput
is not as high as expected
203 All purchased goods are
sent to the warehouse
205 Increases in customer
order quantities after goods
are on hand
(D1) To Page 4
2
202 Extreme upward shifts
in demand
201 Increase in total base
personnel
(D2) To Page 4

3. 306 It takes government
approval to implement a
warehouse management
system
308 It is costly to
implement a real-
time warehouse
management
system
307 The Exchange
can not implement a
new WMS
309 Difficult for
manufactures to
implement RFID into
products
(A) To Page 4
310 The Exchange
attempts to be cost
effective on ordering
312 It is most
cost efficient to
utilize economies
of scale
(B) To Page 4
3
(E) From
Page 1
There are conflicting
goals between the buying
department and the
Distribution Center
301 The Distribution
Center management
dictates the DC goals
303 The Distribution Center
focuses on real-time
visibility of goods
302 The Distribution
Center focuses on
data integrity
305 The Distribution
Center wants a sufficient
management IT system
311 Buyers focus on
cost effectiveness for
purchasing
304 The current
Buyer’s policy is to
purchase at the lowest
unit cost to
accommodate
demand for all
distribution centers

4. 422 There is a
lost opportunity
for sales421 Seasonal
demand
increases
UDE #8
420 The warehouse has a large
percentage of seasonal
products in inventory
UDE #1
423 Net profits
are not as high
as expected
416 It is a necessary
condition to have
seasonal items in stock
before distribution
415 There is
a long lead
time for
receiving
products
413 Buyers
over stock
demand for
perishable
goods
408 buyers must
order in large
quantities
410 Seasonal items from
over sea’s require long lead
time
414 The Exchange
holds inventory for
long periods of time
418 There is a
large percentage
of spoilage
UDE #2
417 The warehouse has
a large percentage of
expired goods
412 Actual demand
is often less than
forecasted demand
UDE #4
407 The
Predicted
forecast is
inaccurate
(A) From Page 3
409 Seasonal items are only
ordered a few times a year
UDE #3
406 There is no way for
the Exchange to monitor
real-time information
402 Monitoring real-time
information is critical for
accurately forecasting
demand
404 The Exchange
has not been
implementing the
necessary IT
programs
(B) From Page 3
(D1) From Page 2
403 The possibility
for errors is inherent
in forecasting
405 The Exchange does not have
an updated IT system in place
401 The
government has
not improved the
necessary IT
program
411 The exchange
under forecasts
demand
419 The
exchange has
shortages of
perishable
goods
OR
(D2) From Page 2
4