Clothing Markets in the World

Q.1)

Japan is one of the largest and most sophisticated clothing markets inthe world, and its fashion designs and product quality enjoy high reputationworld-wide. The fashion industry is trendy as people closely follow thechanging trends in the market. As compared to US, fashion products inJapan have short life cycles. There is uncertainty in demand due to fastchanging trends and increased seasonality despite no major change inseasons. Moreover, the fashion apparel industry is highly competitive. Itfaces competition, both, locally and internationally. With the seasonalvariation in the demand for a certain line of clothing a need of sophisticatedsupply chain management arises. As mentioned in the case study, threedistribution alternatives are available i.e. company-owned stand alone stores,shops in fashion malls, and shops within department stores "store-within-a-store". Most fashion retail chains operate via specialty retailers of private-label apparel (SPAs) like World Co. Ltd. SPAs are the fashion companieswho apply fast fashion policy in their business model, which makes it possible to integrate planning, production and sales, thereby encompassingthe complete distribution channel and customer service

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Since, the products face short life cycles with uncertain demand it needs lowinventory levels with efficient replenishing of sold stock. By focusing onsophisticated forecasting methods, taking account of the historical sales dataand changing trends in the market conditions, retail chains can cater tocustomer needs effectively. The company can gather point-of-sale data fromits retailers and analyze consumers purchase trends to estimate the quantityof a particular product required in certain retail store. It will give better ideaof consumers' preferences in that location. For this company can offer itsretailers latest information technology tools and can also encourage them toinstall systems for efficient and speedy sales ordering.

Q.2)

World has taken certain substantial steps to improve the three things.First, there were two stages of demand forecast, the initial forecast and then revising it based on early sales data. Aggregate forecast from "distributionside" and "category side" was made and the maximum of the two wasselected. Distribution side forecast was based on the total demand from eachstore. For existing stores, historical sales data, growth rates, seasonality,competitor actions and changes in macro economic situation wereconsidered to forecast sales growth. For new and future stores, it used theamount of foot traffic, target customers who come there and competitor locations to forecast. Based on demand forecast for each store categoryforecast for each category was derived based on the percentage of its saleexpected at a particular store.In the