The Bookstore Should

In response to the identified issues, the bookstore should adjust its market size estimation and lower the buyback volume accordingly. The store can run a detailed demographic analysis based on historical data, and figure out with a given student population, the average proportion of students that buy textbooks from the bookstore. Also, it can derive the proportion of students that tend to buy used textbooks. Additionally, the store can collaborate with the university to obtain class size information to better estimate the market demand.

Moreover, the human resource manager should investigate the reasons for such a high turnover rate for the returns manager position, and increase the salary compensation or work condition accordingly to create more incentives for retention. On top of that, the store should also consider hiring more employees and dedicate specific employees to take charge of the inactive books section. The finance department could help to run an analysis to determine the optimum number for efficient operation.

Lastly, the store should consider revising its return policies. Most publishers do not take back books with broken seal, but the bookstore allows students to return books in such condition. These books end up sitting in the warehouse, and the store has to write them off when they become obsolete. Also, as some publishers do not allow returns and others allow a ninety-day window period, the store can incorporate the customized deadlines into its return policies. Therefore, it has a higher chance of successful returns, thus incur fewer losses due to inventory obsolescence.

Inventory Practices

The flowchart provided in the case reveals a few major weaknesses in the store’s inventory practices. First of all, there is no control in place to ensure the inventory received were of the right price and amount. The warehouse only issues one copy of the invoice, which is directly sent to the