Northco:

1. What makes it difficult for Northco to match supply with demand? How should Michaels think about the costs of over or under-stocking? Identify the elements of over and under-stocking cost in this case.
2. Identify changes to the way Northco does business currently that would enable it to better match supply with demand. Identify the costs and difficulties associated with implementing each of these changes.
3. How does the cost of working capital impact over and under-stocking costs at Northco?
4. Suggest a web/online strategy for the firm.