Webster University

MARKETING 5000

Abstract INVENTORY MANAGEMENT AT BIG10SWEATERS.COM 2 Maintaining proper inventory is a big challenge for many organizations especially when the company is new to the market and only has a small amount of historical data to forecast demand. Rhonda and Steve are recent college graduates and partners who started the company Big10Sweaters.com. They offer premium logo sweaters for Big Ten colleges and are concerned with the amount of inventory that is carried in a small warehouse area located with the subcontractor who applies customized monograms. Forecasting demand is a major problem for the company. This year the company is selling to two additional Big Ten schools. From the demand estimates for the upcoming year, the aggregate demand forecast and standard deviation for the aggregate demand was used to determine how many sweaters to hold in inventory. It was determined that a total of 7,776 sweaters need to be ordered and held in inventory, 375 being safety stock. This will give the company an increased end-of-year cash flow of approximately $66,095. The management decisions made up to this point for the company have proven to be successful. If Big10Sweaters.com wants to develop in the future, they will have to find ways to better use their capabilities and assets. Inventory Management and Forecasting Demand at Big10Sweaters.com Big10Sweaters.com is a new company that started last year by two recent college graduates, Rhonda and Steve. It sells premium logo sweaters for Big Ten colleges with a special large monogram that has the customer’s name, major, and year of graduation. Last year, it only sold to three schools. This year, it plans to expand to a few more schools, and target the entire Big Ten Conference within three years. For the upcoming season, the firm wants to sell sweaters to five of the largest schools in the Midwest region of the United States. The business is cyclic, and sales are concentrated around the college football season, which runs between late August and the end of each year. Last season, the firm ordered the minimum of 5,000 sweaters required