Quick response in the apparel industry: Analysis and application

Traditionally, fashion products have incurred high losses due to stockout and inventory obsolescence since long lead times coupled with a concentrated selling season force all or at least most production to be committed before demand information is available. Under a Quick Response system, leadtimes are shortened sufficiently to allow a greater portion of demand to be scheduled in response to initial demand. In this thesis, we begin by describing the essence of Quick Response and surveying the literature pertaining to the topic. We then model and analyze the decisions required under Quick Response and give a method for estimating the demand probability distributions in our model. We applied these procedures with a major fashion skiwear firm and found that cost relative to the current informal system was reduced by enough to increase profits by 50%. Relative to the cost that would have been incurred if no response were used, optimized response reduced cost by enough to nearly quadruple profits. We suggest possible directions for further research including an application to the retailer's inventory problem.