1.

What advantage does Zara gain against the completion by having a very
responsive supply chain?
Answer:
Zara is a manufacturer and retailer fashion industry. Zara made policy of “scare production”
which encourages consumers to shop more frequency for new design because of both quality
and trust. The policy which they have adapted allows Zara to build customer satisfaction and
increase their loyalty among customers.
Zara retailer fashion and manufacturer industry, as the product display in store, with more
choices of new design attract most customers and likely to match consumer preferences.
Furthermore. Zara is becoming to sell most of its products at full price and at low marked low
price which results in fewer inventories. When demand for clothing is unpredictable, Zara is
flexible in responding to the need and want of customers. First of its’s responsive strategy
is “fast production cycle” with “efficient distribution system” this allows Zara to introduce new
design and distribute to all stores by weekly. Due to this policy Zara had high profit margin.
2. Why has Inditex chosen to have both in house manufacturing and
outsourced manufacturing? Why Inditex maintained manufacturing
capacity in Europe even though manufacturing in Asia is much cheaper?

Answer:
the cost of production in Spain is consider to be high and highest comparing to Asia countries
where cost was very low but Zara factories is located in areas where is known to be a cheap
labor in Spain and it was contrary to rest of Spain. The factories are also located near the
distribution center so the cost of delivers finished good to be low. Zara maintain manufacturing
in Europe rather than move everything to Asia because the company and management believe
that having a factory its own country, the company can manage and response to unpredictable
quick change of demands. Although Zara will be flexible in producing products with uncertain
demand especially the fast move of new product design. .. Outsourced manufacturing is for
general, common and out season products. This outsource manufacturing als benefits the
company as low cost of production, supplier knowledge bases and development and the
available of new technologies and innovation. Inditex chose to have both kind of manufacturing
because In-house manufacturing allows Zara to be able to respond quickly to the changing trend
3. Why does Zara source product with uncertain demand from local
manufacturers and products with predictable demand from Asia
manufacturers?
Answer:
The strategy is respond to the fickle need an to improve customer satisfactions. Another reason
for Zara to product goods in Europe because it wants to test the demand for new innovation
design before it distribute to worldwide market for better customer understanding of that
 specific good. On the other hand, products with predictable demand sources from Asia
manufacturers because Zara could produce product with low cost. Since it has certain demand
with the large volume of Zara sources products with uncertain demand from local
manufacturers because local manufacturers can supply quick products to the need of each store
in local market. productions, Zara chose to manufacture that good with low cost but large
amount of goods for greater profit margin.
4. What advantage does Zara gain from replenishing its store twice a week
compared to less frequent schedule?
Answer:
Zara industry was allowed due to replenishment in inventory management Frequent
replenishment allows Zara to continue supply new design as consumer desire. Strategy where all
stores are well managed. With this effective strategy brought greater customer satisfaction and
gain more market share This means each store keep update the stocks geographically globally

5. Do you think Zara’s responsive infrastructure is better suited for

online sales or retail sales?

Answer:
Zara’s responsive infrastructure is better only for manufacture and retail. The speed delivery is one
of the core online business strategies. online sale, there is a need of more distribution center at the
countries its service provided for fast deliver. The most contribution of this success is it effective
supply chain from distribution center that enable Zara to distribute products at efficient time to
meet consumers demand. Zara’s business success has demonstrated from the accuracy of demand
forecasting, efficient distribution, flexible and quick response, well managed inventories, lower mark
down and less advertisement, which result in high profit margins.