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main facility has a capacity of only 45,000 folded garments per hour. This facility admittedly
has its limitations unless more capacity can be created elsewhere. Also, the vertical
integration of manufacturing and distribution greatly helped to reduce the Bullwhip effect.
On the retailing end, the business model allows for Zara to have a much more fashion
forward line because it can commit to its product line much later in the season. In fact, the
design process does not seem to stop and the designers are constantly evaluating consumer
preferences.
2. Challenges Faced by ZARA
logistic model.
Developing vertically integrated supply chain system incurs very high cost in
developed countries.
Gap
H&M
Benetton
Inditex
10.46%
Net Margin
-0.06%
9.60%
7.05%
Asset Turnover
1.82
1.96
0.74
ROA
-0.11%
18.78%
5.25%
13.05%
ROE
-0.27%
24.85%
11.93%
22.88%
1.25