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Non-Tech : Radica Games (RADA)

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To: David who wrote (3389)	3/9/1998 11:12:00 AM
From: Sigmund	Read Replies (2) of 7111

David. This approach might be the best given the circumstances but it can hardly be described as "efficient". Or if "efficient" it is certainly not the most "effective" inventory replenishment strategy ever devised. Presumably you gain manufacturing cost savings this way. But the penalty in terms of inventory in the pipeline, potential for obsolete merchandise, time to market and most importantly these days stockouts is very high. A very good inventory control system might ameliorate some of the problems. For example if you knew who was short and who was long re each sku you might be able to divert some shipments to where they were most needed. It might require some agreement from your customers but they would as a group benefit from this approach. I gather that there is a large cost to you to move the stuff through warehouses but again they may need to play a larger role. Of course if you are manufacturing limited it probably doesn't matter since you can't sell what you haven't manufactured. But that situation will not last forever as I understand you are increasing capacity. Have you ever thought about doing some manufacturing closer to your markets?

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