3. Develop a model of how you think the warehouse should work in this environment.

One constant problem Amy had complained about when she was head clerk was the difficulties she had with the warehouse replenishing supplies for her areas of responsibility. She was sure the problem was not hers. The store used point-of-sale terminals, in which the cash register doubled as a computer, instantly recognizing inventory movement. She also realized that shoplifting and other forms of loss were a constant problem in retail stores, so she instructed all her clerks to spot count inventory in their areas of responsibility whenever there was a lull in store traffic. The store computer had a built-in program to suggest replenishment orders when the stock reduced to a certain quantity. Amy had learned, of course, that these were only suggestions, since she knew that some items were “faddish" and would have to be ordered sooner or not reordered at all depending on how the fad was progressing. Some items were seasonal in nature, which needed to be accommodated, and she was also aware when an item would go on sale or have a special promotional campaign. These were announced well in advance during the monthly managerial meetings, and she had good estimates as to the projected impact on demand.
It was because she was so effective at managing the inventory in her area that she was so vocal about the problems at the warehouse. It seemed that almost everything she ordered for replenishment from the warehouse was a problem. Some items were late, occasionally by as much as six weeks. Other items were replenished in quantities far larger or smaller than what was ordered, even if they were occasionally delivered on time. It finally seemed to her that every warehouse delivery was a random event instead of the accurate filling of her orders. Her complaints to general management stemmed from the impact of the warehouse problems. Customers in her area were complaining more often and louder as stockouts of various items became a pattern. Several customers had vowed to never again shop at CostMart because of their frustration. One customer even physically dragged Amy over to the sign above the entrance to the store—the one that proclaims “CostMart—Where Customer Service Is in Charge”—and suggested that she could be sued for false advertising.