Definition and analysis of Never Out Of Stock (NOOS) products at Ellos AB

Abstract

Ellos AB is a leading Scandinavian based apparel and home textile retailer founded in 1947. The company as a part of their reorganization efforts is emphasizing in adopting effecting strategies for increasing their efficiency by effectively using the available resources. Never Out Of Stock (NOOS) products sold by the company contributes to a major share of the incomes and therefore an effective supply chain strategy would help the company achieve the best results for their efforts. The thesis is done on behalf of Ellos AB. This purpose is to clearly define the NOOS products at Ellos AB. Further on, an analysis on the defined NOOS product segment would be done in order select a suitable supply chain strategy for the segment which would help increase the effectiveness of the Ellos AB supply chain. The author conclude that the definition of the NOOS products can be done through product segmentation. Also, the NOOS supply chain can be optimized by adopting a material planning system of Joint Economic Lot sizing Problem (JELP) for better order planning. This would then be complimented by a Re-Order Point (ROP) replenishment system to reduce the tied up capital and reduce the risk of shortages.