HIGH TOWER DEPARTMENT STORES Harvard Case Solution & Analysis

Decision Problem

The problem in the decision making process is that the customers’ demand and their changing purchase trends are very difficult to guess.Thisdifficulty may result in the items which were imported in large quantity failed to attract the customers and were sold little.Thisresulted in less profitability and increase in the unsold stock of the stuffed animals. On the other hand, if the customers’ buying trend is focusedon a particular stuffed animal, then there is stock out risk and therefore High Tower Store will have to face forgone contribution on that item. This will result in decreasing the profitability and also affect the future sales of High Tower Store as the customers may become upset asa particular item was not available and they might decideto go for purchasing from some otherstore.

The stock out of one item may affect the sales of other item.This is because thestock out of one item may force the customer to buy other type of stuffed animal in the stock.Accordingto Brown this factor will cancel out the loss of contribution resulted on stock out item.


Selecting process of the animal for Christmas:

Currently, Brown has carried out the decision of the import of a particular item on the basis of selling the item on testing basis first to check the taste of the customer and market response toward a particular stuffed animal.Ifa particular stuffed animalshows good selling figures in the testing phase, then the High Tower Storecan go sell that product regularly. In other words, Mrs. Julia used to hedge her bets by ordering a small amount of the new models of the stuffed animals to test their sales potential. These test models are sold in only one store in the chain, and the results are used to decide the fate of each stuffed animal for succeeding year.

If a particular stuffed animal does not get positive response from the customers with respect to its sell in the testing phase, then the High Tower Storewill decide not to buy the stuffed animals for acoming year.

Mrs. Juliais preparing to analyze the test sale data for the models of stuffed animals tested in 1992; these stuffed toys include a bear toy, a pig toy and a raccoon toy.The entirepurchases figure of the animals was fifty inquantity. The result of raccoon toy was quiet favorable, as the 32 units were sold from fifty.Thesale of pig toy was only four units and that of the bear toy the result was ten units. This gives the closing inventory figure of forty, forty six and eighteen for bear toy, pig toy and raccoon toy respectively.

These results have made it clear for Mrs. Julia with respect to the decision regarding the import of raccoon toyas it is the best option among three stuffed animals with regard to the test sale of the item. Therefore, the first rank within the three animals belongs to the raccoon toy. However, Mrs. Julia is facing the challenge regarding the choice of making the order for the bear toy because unlike the raccoon toy, the bear toy has not determined its success in the future in the phase of the normal sale.............

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