Republic of the Philippines

UNIVERSITY OF RIZAL SYSTEM  

Binangonan, Rizal

ACTIVITY 7

DIRECTIONS: Choose a company that you are familiar with or interested in and
discuss its INVENTORY MANAGEMENT.

Name of Company: Nike Inc.

In the early 2000s, Nike had some major inventory management problems. Fortunately,

following this failure, Nike developed an improved inventory management solution to

solve their problems rapidly. In 2001, Nike implemented an updated version of

its inventory management software. The idea of this newly implemented inventory

control software was to help predict which products they would sell the most and thus

prepare the right amount of supply to meet the demand. First, they would produce a

demand forecast, and based on that forecast, they would prepare a manufacturing plan.

That’s how most big corporations (and some small businesses) make their operational

business decisions.

Based on historical sales data of different products, and based on some market growth

estimates, Nike would first prepare a demand forecast for different families of products.

This demand forecast is then used to determine optimal inventory levels, reorder points,

material lead times, etc. And the entire manufacturing plan for months is determined

using these numbers produced by the inventory management software.