Question

3. It is now Prime Day, the deal is selling well, but you just got a call from the vendor explaining that they will not be able to fill any more units for the next 3 weeks. Your Instock Manager (Anjali Patel) says that we should cut the deal off early to preserve inventory for that 3-week period. What are the factors you would consider before deciding whether to cut the product off early? Rate the relevance of each response below. 1. Not Relevant 2. Slightly Relevant 3. Moderately Relevant 4. Very Relevant 5. Highly Relevant Vendor relationship 1 2 3 4 5 Competitor activity 1 2 3 4 5 Revenue impact of being out-of-stock for 2 weeks 2 3 4 5 Impact of negative experience on customers 1 2 3 4 5

Answer 1

The factors to consider before deciding whether to cut the product off early and their relevance:

1. Vendor relationship: 5 (Very Relevant)

2. Competitor activity: 4 (Very Relevant)

3. Revenue impact of being out-of-stock for 3 weeks: 5 (Highly Relevant)

4. Impact of negative experience on customers: 4 (Very Relevant)

What informs these factors?

These are the factors and their relevance:

1. Vendor relationship: 5 (Very Relevant)

- Maintaining a positive relationship with the vendor is crucial for long-term business success. Understanding their constraints and working collaboratively can lead to better solutions.

2. Competitor activity: 4 (Very Relevant)

- Monitoring competitor activity is important to assess the market dynamics. If competitors are offering similar products or promotions, it may influence the decision to cut off the deal early.

3. Revenue impact of being out-of-stock for 3 weeks: 5 (Highly Relevant)

- Assessing the potential revenue loss during the out-of-stock period is crucial. This directly impacts the financial performance and customer satisfaction.

4. Impact of negative experience on customers: 4 (Very Relevant)

- Customer satisfaction is a key metric for long-term success. A negative experience, such as unfulfilled orders, can harm the brand image and customer loyalty.

Considering these factors, it's important to weigh the short-term gains from the current deal against the potential long-term consequences of running out of stock for three weeks. The decision should be based on a balanced assessment of vendor relations, competitor activities, revenue impact, and customer experience.