CONCLUSION When the customer demand is higher than excepted product stock out

Conclusion when the customer demand is higher than

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CONCLUSION When the customer demand is higher than excepted product stock out is the result. H&M Online provide their customers with the possibility of purchasing products that are out of stock and when a customer order includes products that are out of stock the order is split delivered. Split deliveries result in a low customer service level and high costs for H&M Online. The master thesis presents recommendations on how to allocate the goods in order to achieve a higher customer service level by primarily increasing the stock availability and delivery reliability while maintaining the profit
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CONCLUSION . A recommendation is to classifying products according to their sales volume and placing the products with high sales contribution at decentralized distribution centers and the product with low sales contribution at a centralized warehouse. An allocation of products in accordance to product classification will result in higher stock availability of each product. By also utilizing virtual pooling the stock availability will further increase and by utilizing order swap the amount of split orders will be close to distinct. Finally, it is recommended for H&M Online to balance their distribution centers’ inventory by optimizing the return flow of products.
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