The report states that Costco has direct buying relationships with many producers of national brand name merchandise. This is paramount important to ensure an efficient and sound supply chain management. Costco approach streamlines communication and help reduce purchasing lead time, which in turn leads to lower inventory levels. This relationship also helps improve demand-forecasting accuracy. Improving forecasting reduced uncertainity, which leads to lower safety stocks Costco has to stay store resulting in lower total inventory costs. Improved demand forecasting also contributes to the development of better staffing plans for Costco, which in turn lead to lower personal costs, lower inventory costs and improved customer service. The report also identifies that no significant portion of merchandise is obtained from any one of these or any other single supplier. Contrary to common belief Costco ensure that it does not have any difficulty in obtaining sufficient quantities of merchandise, and they believe that if one or more of our current sources of supply became unavailable, Cos....

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