Ask Financial Management Expert

Luxury athletics and yoga apparel retailer Lululemon Athletica has had great success in its less than 20 years of operation. With more than 200 retail locations, the company netted a 51.4 percent growth in revenue from fiscal year 2010 to 2011 and projected a more than 10 percent growth in the first quarter of fiscal year 2012. While the company has made its name on high quality, high-cost apparel for fitness enthusiasts—a pair of yoga pants can cost as much as $100—a recent manufacturing error shook consumer confidence and gave rise to quality control problems in the company's supply chain. In March 2013, Lululemon was forced to recall its signature "Luon" yoga pants after finding they were so sheer that they were practically see-through. The recall of the nylon and Lycra-blend Luon pants followed a similar event in 2012, when several of the company's swimsuits and light-colored pants were found to be too sheer. According to RBC Capital Markets analyst Howard Tubin, Lululemon’s fabric errors may simply represent a growing pain for the rapidly expanding company. “They tried to get in front of this by not letting the merchandise stay on store shelves and they’re working with vendors to try to figure out how this happened,” said Tubin. “They're probably handling it the best way they can.” Citing Lululemon’s fourth manufacturing snafu in one year, Credit Suisse analyst Christian Buss strikes a slightly less forgiving tone: “Their supply chain hasn't kept up with the demand that they have for their product, and their quality control processes have been proven inadequate.” "Lululemon Athletica Inc. Announces Fourth Quarter and Full Year Fiscal 2011 Results," Lululemon, March 22, 2012, www.lululemon.com/media/index.php?id=219 (Accessed March 27, 2013); "Lululemon: Yoga Demonstration Not Required for Returns," CBS, March 27, 2013, www.cbsnews.com/8301-201_162-57576590/lululemon-yoga-demonstration-not-required-for-returns (Accessed March 27, 2013); Wendy Kaufman, "Lululemon's Too-sheer Yoga Pants Reveal Problems in Company's Supply Chain," NPR, March 20, 2013, www.npr.org/2013/03/20/174867737/lululemons-too-sheer-yoga-pants-reveal-problems-in-companys-supply-chain (Accessed March 27, 2013).

Suppose that, frustrated by a series of fabric defects and recalls, Lululemon contracted a consultant to assess its logistical service needs and provide solutions that prevented such errors from occurring. This would exemplify the use of:

A. Nearshoring

B. A third-party logistics company.

C. A fourth-party logistics company.

D. Offshoring.

E. Outsourcing

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92861045

Have any Question?


Related Questions in Financial Management

Assignment problems1 on the day harry was born his parents

Assignment Problems 1. On the day Harry was born, his parents put $1600 into an investment account that promises to pay a fixed interest rate of 5 percent per year. How much money will Harry have in this account when he ...

1 activities of a company that require the spending of cash

1) Activities of a company that require the spending of cash are known as: A) Uses of cash. B) Cash on hand. C) Cash receipts. D) Sources of cash. E) Cash collections. 2) Relationships determined from a firm's financial ...

Module discussion forumto prepare for this discussion

Module : Discussion Forum To prepare for this discussion, review "Basics of Speechwriting" and "Basics of Giving a Speech" in textbook Chapter 15. Then watch this video of Apple founder and CEO Steve Jobs giving the 2005 ...

Launching a new product linefor this portfolio project

Launching a New Product Line For this Portfolio Project Option, you will act as an employee in a large company that develops and distributes men's and women's personal care products. The company has developed a new produ ...

Question 1 discuss valuing bonds and how interest rates

Question : 1) Discuss valuing bonds and how interest rates affect their value. Also consider the importance of the yield-to-maturity (YTM). 2) Discuss common stocks and preferred stocks. Also, which common stock valuatio ...

Introductionlast week you determined the root causes of the

Introduction Last week, you determined the root cause(s) of the problem you are trying to resolve for your final paper. As a reminder, the decision you are working on is the one that you selected in week two. This week, ...

You have owned and operated a successful brick-and-mortar

You have owned and operated a successful brick-and-mortar business for several years. Due to increased competition from other retailers, you have decided to expand your operations to sell your products via the Internet. ...

You will be conducting an interview with a market research

You will be conducting an interview with a market research professional or a company representative. Use the results of your research to make specific recommendations on how market research can be applied to the Marketpl ...

Question 1 what is marketing research what are the two

Question 1: What is marketing research? What are the two primary types of research? Question 2: What factors influence marketing research? Question 3: The role of statistics in business decision-making? Assignment : Sele ...

Chapter 74 for commercial banks what is meant by a managed

Chapter 7 4. For commercial banks, what is meant by a managed liability? What role do liquid assets play on the balance sheet of commercial banks? What role do money market instruments play in the asset and liability man ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As