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{"id":3156,"date":"2023-02-19T16:11:47","date_gmt":"2023-02-19T16:11:47","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/apply-it-13-3-production-planning\/"},"modified":"2025-06-25T12:48:04","modified_gmt":"2025-06-25T12:48:04","slug":"apply-it-13-3-production-planning","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/apply-it-13-3-production-planning\/","title":{"raw":"Apply It 13.3: Production Planning","rendered":"Apply It 13.3: Production Planning"},"content":{"raw":"<section class=\"textbox learningGoals\">\r\n<ul>\r\n\t<li>Understand the importance of facility location and layout in production planning<\/li>\r\n\t<li>Understand the difference between materials requirement planning and just-in-time inventory control<\/li>\r\n\t<li>Recognize different ways to visually represent production planning<\/li>\r\n\t<li>Understand the difference between supply chain management and logistics<\/li>\r\n\t<li>Understand the difference between inbound and outbound logistics<\/li>\r\n<\/ul>\r\n<\/section>\r\n<h2>Planning and Logistics Failures<\/h2>\r\n<p>This Apply It continues using the Forever 21 case study video from earlier in this module. The video is included below in case you want to refresh your memory about specific details, but if you have already watched it, you don't need to watch it again.<\/p>\r\n<section class=\"textbox recall\" aria-label=\"Recall\">The video highlights Forever 21's expansion into large physical stores requiring significant inventory investments. The company was also slow to adapt to e-commerce, with only 16% of sales coming from online channels by the time of their first bankruptcy.<\/section>\r\n<section class=\"textbox watchIt\" aria-label=\"Watch It\"><script src=\"https:\/\/www.youtube.com\/iframe_api \" type=\"text\/javascript\"><\/script>\r\n<p class=\"cc-media-iframe-container\"><iframe id=\"tpm-plugin-dadhdheh-3M3boedWvFY?si=1ouqsDxXqxK0x8fz\" class=\"cc-media-iframe\" src=\"https:\/\/www.youtube.com\/embed\/3M3boedWvFY?si=1ouqsDxXqxK0x8fz?enablejsapi=1 \" frameborder=\"0\" data-mce-fragment=\"1\"><\/iframe><\/p>\r\n<p class=\"cc-media-iframe-container\"><script src=\"\/\/plugin.3playmedia.com\/ajax.js?cc=1&amp;cc_minimizable=1&amp;cc_minimize_on_load=0&amp;cc_multi_text_track=0&amp;cc_overlay=1&amp;cc_searchable=0&amp;embed=ajax&amp;mf=13387225&amp;p3sdk_version=1.11.7&amp;p=20361&amp;player_type=youtube&amp;plugin_skin=dark&amp;target=3p-plugin-target-dadhdheh-3M3boedWvFY?si=1ouqsDxXqxK0x8fz&amp;vembed=0&amp;video_id=3M3boedWvFY?si=1ouqsDxXqxK0x8fz&amp;video_target=tpm-plugin-dadhdheh-3M3boedWvFY?si=1ouqsDxXqxK0x8fz\" type=\"text\/javascript\"><\/script><\/p>\r\n<p>You can view the\u00a0<a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/Intro+to+Business\/transcripts\/How+Forever+21+Plummeted+From+%244B+in+Sales+to+Twice+Bankrupt+%7C+WSJ+What+Went+Wrong_transcript.txt\" target=\"_blank\" rel=\"noopener\">transcript for \u201cHow Forever 21 Plummeted From $4B in Sales to Twice Bankrupt | WSJ What Went Wrong\u201d here (opens in new window).<\/a><\/p>\r\n<\/section>\r\n<h3>How might Forever 21's inbound and outbound logistics systems have needed to change to better support their e-commerce transition?<\/h3>\r\n<p>[reveal-answer q=\"617222\"]Click to Show Sample Answer[\/reveal-answer]<br \/>\r\n[hidden-answer a=\"617222\"]Forever 21's logistics systems needed significant changes to support e-commerce effectively. For inbound logistics, the company needed to shift from managing inventory for large physical stores to a model supporting online order fulfillment.<\/p>\r\n<p class=\"whitespace-normal\">For outbound logistics, Forever 21 needed to develop efficient order fulfillment, packaging, and shipping processes for individual customer orders rather than bulk shipments to stores. They failed to develop these capabilities in time to remain competitive.<\/p>\r\n<p class=\"whitespace-normal\">Forever 21 also needed to coordinate inventory across both physical and digital channels to prevent running out of in-demand products and having too much inventory. Their partnership with Shein in 2023 was a late attempt to leverage Shein's e-commerce capabilities, with Forever 21's lineup being offered on Shein's website. But the partnership did not bring in enough sales to offset the losses they experienced from losing customers to online competitors.<\/p>\r\n<p class=\"whitespace-normal\">Finally, Forever 21 needed to reconfigure their transportation systems to handle both store deliveries and direct-to-consumer shipping, balancing the demands of their mall-based stores with online order fulfillment. This was a challenge they ultimately couldn't overcome before bankruptcy.\u00a0[\/hidden-answer]<\/p>","rendered":"<section class=\"textbox learningGoals\">\n<ul>\n<li>Understand the importance of facility location and layout in production planning<\/li>\n<li>Understand the difference between materials requirement planning and just-in-time inventory control<\/li>\n<li>Recognize different ways to visually represent production planning<\/li>\n<li>Understand the difference between supply chain management and logistics<\/li>\n<li>Understand the difference between inbound and outbound logistics<\/li>\n<\/ul>\n<\/section>\n<h2>Planning and Logistics Failures<\/h2>\n<p>This Apply It continues using the Forever 21 case study video from earlier in this module. The video is included below in case you want to refresh your memory about specific details, but if you have already watched it, you don&#8217;t need to watch it again.<\/p>\n<section class=\"textbox recall\" aria-label=\"Recall\">The video highlights Forever 21&#8217;s expansion into large physical stores requiring significant inventory investments. The company was also slow to adapt to e-commerce, with only 16% of sales coming from online channels by the time of their first bankruptcy.<\/section>\n<section class=\"textbox watchIt\" aria-label=\"Watch It\"><script src=\"https:\/\/www.youtube.com\/iframe_api\" type=\"text\/javascript\"><\/script><\/p>\n<p class=\"cc-media-iframe-container\"><iframe id=\"tpm-plugin-dadhdheh-3M3boedWvFY?si=1ouqsDxXqxK0x8fz\" class=\"cc-media-iframe\" src=\"https:\/\/www.youtube.com\/embed\/3M3boedWvFY?si=1ouqsDxXqxK0x8fz?enablejsapi=1\" frameborder=\"0\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p class=\"cc-media-iframe-container\"><script src=\"\/\/plugin.3playmedia.com\/ajax.js?cc=1&amp;cc_minimizable=1&amp;cc_minimize_on_load=0&amp;cc_multi_text_track=0&amp;cc_overlay=1&amp;cc_searchable=0&amp;embed=ajax&amp;mf=13387225&amp;p3sdk_version=1.11.7&amp;p=20361&amp;player_type=youtube&amp;plugin_skin=dark&amp;target=3p-plugin-target-dadhdheh-3M3boedWvFY?si=1ouqsDxXqxK0x8fz&amp;vembed=0&amp;video_id=3M3boedWvFY?si=1ouqsDxXqxK0x8fz&amp;video_target=tpm-plugin-dadhdheh-3M3boedWvFY?si=1ouqsDxXqxK0x8fz\" type=\"text\/javascript\"><\/script><\/p>\n<p>You can view the\u00a0<a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/Intro+to+Business\/transcripts\/How+Forever+21+Plummeted+From+%244B+in+Sales+to+Twice+Bankrupt+%7C+WSJ+What+Went+Wrong_transcript.txt\" target=\"_blank\" rel=\"noopener\">transcript for \u201cHow Forever 21 Plummeted From $4B in Sales to Twice Bankrupt | WSJ What Went Wrong\u201d here (opens in new window).<\/a><\/p>\n<\/section>\n<h3>How might Forever 21&#8217;s inbound and outbound logistics systems have needed to change to better support their e-commerce transition?<\/h3>\n<p><div class=\"qa-wrapper\" style=\"display: block\"><button class=\"show-answer show-answer-button collapsed\" data-target=\"q617222\">Click to Show Sample Answer<\/button><\/p>\n<div id=\"q617222\" class=\"hidden-answer\" style=\"display: none\">Forever 21&#8217;s logistics systems needed significant changes to support e-commerce effectively. For inbound logistics, the company needed to shift from managing inventory for large physical stores to a model supporting online order fulfillment.<\/p>\n<p class=\"whitespace-normal\">For outbound logistics, Forever 21 needed to develop efficient order fulfillment, packaging, and shipping processes for individual customer orders rather than bulk shipments to stores. They failed to develop these capabilities in time to remain competitive.<\/p>\n<p class=\"whitespace-normal\">Forever 21 also needed to coordinate inventory across both physical and digital channels to prevent running out of in-demand products and having too much inventory. Their partnership with Shein in 2023 was a late attempt to leverage Shein&#8217;s e-commerce capabilities, with Forever 21&#8217;s lineup being offered on Shein&#8217;s website. But the partnership did not bring in enough sales to offset the losses they experienced from losing customers to online competitors.<\/p>\n<p class=\"whitespace-normal\">Finally, Forever 21 needed to reconfigure their transportation systems to handle both store deliveries and direct-to-consumer shipping, balancing the demands of their mall-based stores with online order fulfillment. 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