Nordstrom's Perpetual Inventory System

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:


Case Code : OPER025 For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges


Inventory Management
Case Length : 16 Pages
Period : 1994 - 2003
Organization : Nordstrom
Pub Date : 2004
Teaching Note : Not Available
Countries : USA
Industry : Retail


The case deals with the inventory and merchandise management efforts undertaken by the US-based specialty retailer Nordstrom during the late 1990s and early 21st century. After providing a brief background of the company, the case details the problems it landed in by the early 1990s due to the changing industry dynamics. The case then analyzes how Nordstrom realized that its poor performance was largely due to its not adopting modern inventory management practices. Thereafter, the features and implementation of the new perpetual inventory management system adopted by the company are examined in detail.

The case ends with information on how Nordstrom was reaping the initial fruits of its efforts in late-2003. Finally, it provides information on the two general inventory models adopted by firms - the P and Q systems.


The role of inventory management in the operations management strategic framework for retailing companies in general, and for specialty retailers in particular

Various inventory models, their features, applicability and their advantages and disadvantages


  Page No.
Inventory 'Mis'management 1
Background Note 2
The Downslide Begins 3
Inventory Management - A Key to Retailing Success 4
Taking the First Steps 6
Setting Things Right - Implementing the New System 7
Some Respite, At Last 11
Exhibits 13


Inventory, merchandise management, US, Nordstrom, 1990, background, problems, industry dynamics, poor performance, modern inventory management, perpetual inventory management system, 2003, inventory models , P and Q systems

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