Last week in class we discussed the importance of managing inventory and managing suppliers. It has been stated in class many times that a company is only as strong as its weakest supplier. Simply stated, suppliers can make or break your business.

An interesting article on MSNBC (click here) discusses how J.C. Penney is revamping its inventory’s pricing with discounts of at least 40%. What exactly does this mean? As the title of the article simply points out, lower prices and fewer sales.

The article discusses how many Penney shoppers usually capitalize off the many sales the store offers, however, the frequency of the sales were confusing many consumers. Now, instead of all the sales, Penney will just have drastically cheaper products. The company is trying to make itself more like WalMart and Target.

The article doesn’t explain how exactly Penney plans on cutting the prices, but if it is adopting methods used by the likes of WalMart, it can be assumed that they’ll be cutting costs directly through suppliers. WalMart is the leader of supply chain management, which is how it has managed to keep prices so low.

One of the issues that the article mentions that may backfire against Penney is the loss of the customer who enjoys sales. Personally, I think it could be a very interesting psychology essay to go on and research how consumers think when it comes to sales. Personally, I don’t necessarily go out and look for sales, but when I do find out I’ve saved money due to being at the right store at the right time it makes me happy.

What do you all think? Is J.C. Penney making the right decision? Can it begin to compete with the likes of WalMart and Target, or is the company just a liability?

Last Friday’s class we focused on the topic of Forecasting. “What is forecasting,” you ask? Well, it is the process of predicting a future event and is one of the most important tools when it comes to making a decision for a business! Forecasting can aid in fields such as inventory, personnel and of course production and is used in every department of a business.

One of the types of forecasting that we went over in class was demand forecasts. Demand forecasts aid in predicting sales of an existing product. In class we went over a few different numerical techniques to come up with some demand forecasts, but I have some personal experience from working retail that correlates directly to qualitative methods forecasting.

I worked for a high-end contemporary woman’s boutique for a extended period as a sales representative and it was my job to understand and be aware of what the trends were for the season, and because of this I paid heavy attention to blogs and magazines revolving around fashion to help me maximize my sales. There was one instance where I noticed we were shipped about 4 of a particular dress and the next day I had read that Kim Kardashian, a prominent celebrity, had just worn it. I expressed this to my manager and she went ahead and contacted the designer and ordered about 5 more of the dress. Sure enough, the first and second shipments of the dress sold out completely, and we were able to maximize our sales of the dress through understanding the trends and how it can affect forecasting.

Today, the Wall Street Journal published an article about how GM, and several other major companies are switching to Apple products over Windows PCs in their offices. What can we forecast about sales for Apple? Do we think this will start a trend among other companies still only using PCs?

Here’s a link to the article, however, you will need to subscribe in order to read it fully:

http://online.wsj.com/article/SB10001424052970203721704577156704148493394.html?mod=WSJ_hp_MIDDLETopStories