The case describes that Seven-Eleven Japan micro-manages the supply of each and every stock-keeping unit (SKU) for every store through rapid product replenishment. The company has more than 5,000 SKUs as of 2004, and each store can take up to 3,000 of such SKUs. The company's strategy is to keep only those SKUs on the shelf that sells thereby reducing the wastage of the limited availability of shelf space.

Determine the impact associated with such a strategy on the following parameters:

Inventory levels that need to be maintained by the company DCs (high or low) (1 mark)

Inventory levels that need to be maintained by the company stores (high or low) (1 mark)

Cost of product replenishment to the stores (high or low) (1 mark)

Obsolescence cost (high or low) (1 mark)