Jessabelle C.

Echem
BSBA-2

1.Analyze and describe the economic requirement/s that could have influenced the major
problem in the given case study.
The economic requirement that influenced the major problem in the given case study is
Production Economies Of Scale, H&M produce or creates their clothes in batches to meet
existing and future product demands, which make them struggle in getting rid of excess
inventories.

2.Recommend the appropriate type/s of warehouse/s that will help H&M better manage
their excess inventories.
For H&M to better manage their inventory, they have to try Factory Warehouse. This type of
facility connects production with wholesalers. It typically supplies a small number of large
orders daily with advance information about the order make-up. Order makeup pertains to the
accurate number of orders/goods required in a particular geographical Area/market.

3.Identify and describe the economic benefit of warehousing which may leverage H&M’s
sales.
The economic benefit of warehousing which may leverage H&M’s sales is Cost-effectiveness,
Warehouses allow consolidation and break-bulk operations. Through the use of consolidation
and break-bulk programs, items going to similar destinations are being combined as a single
shipment. As a result, customers can enjoy lower shipping costs since total transport costs are
shared among them.