As one of the fast-fashion giants, Zara is well-known for its quick response, high fashion products, competitive prices and a large number of stores. To achieve a good balance between keeping inventory displayed in order to promote sales and eliminating the impact of excess shipment requests, Zara focuses on improving its global distribution process.
In mid-2005, professors from UCLA and MIT began to work with Zara employees under the sponsorship of Zara’s CFO to research and optimize Zara’s inventory management processes (Caro et al, 2010). They leveraged Zara’s constraints and created a new process that has shipment quantities as its main decision variables and the maximization of global sales as its objective. The new process consists of two models: the forecasting model and the optimization model.
In their paper (Caro et al, 2010), the authors explore the managerial challenges Zara met in the former distribution process, introduce the solution they provided to the company and explain the contribution brought by their works.