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Imagine you are in charge of Zara’s supply chain operations. Expand this supply chain to support more stores, and keep inventory and operating costs under control. Enter the collective demand, costs and on-hand inventory for all actual stores represented by a single store in your model. Stores can be on actual Zara store locations or can be placed in the middle of a cluster of actual Zara stores. ZARA SUPPLY CHAIN REPORTING TEMPLATE: Import your simulation data into this template to create 15-DAY P&L REPORTS and key performance indicators.

And depending on how you respond, other problems will appear as you work toward getting your supply chain to run for 15 days.

Show what you did to address those problems. Show how a supply chain with these capabilities makes it possible for Zara to use its fast fashion business model. This more accurately models the process where Zara pays for one-way shipping containers to move products from one facility to another without paying the full round-trip cost (carbon per km was also adjusted to half of normal for the same reason). Product deliveries are made to stores by airplane and truck from this facility every day.

Assume air freight rates from Zaragoza remain the same to any city, but truck transportation costs will be different in different cities. Research salary levels and median incomes in different cities. New stores open in cities with median incomes high enough to be profitable markets for Zara. Zara can afford this increased shipping cost because it does not need to do much discounting of clothes and it also does not spend much money on advertising.

Vehicle operating costs per km are set to be just half the normal cost for trucks and airplanes.

So items come off delivery trucks and go directly onto the sales floor. It means about half of the clothing the company sells, which includes most of its high margin and unique fashion items (but not its lower margin basic items), is manufactured based on highly accurate, short-term (2 - 6 week) demand forecasts.

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