HexenLord said:
I understand that in order for a company like MS or Sony to ship, the retailer has to actually order them. But when Walmart orders 50 Kinect sensors and Sony ships them knowing Walmart will probably only need 20 for that day, they are overhshipping consumer demand regardless.
Undershipping on the other hand is possibly at the fault of the company. If walmart orders 50 more Move controllers and Sony can't keep up with demand, they are undershipping. |
Nope. You've just described the retailer over-ordering.
Overshipping is the supplier sending more than ordered - i.e. Walmart orders 50 and Sony send 60. This can happen but normally if the supplier goes to far the retailer will complain and may insist on returning some or some other form of recompense for having to handle more inventory than they want. A more formal way to overship is for the supplier - Sony - to contact Walmart and ask if they could send more - depending upon quantities the retailer will often agree. So for example Walmart in total order 100,000 and Sony ask if they can ship 110,000.
If they send exactly what's ordered they've shipped accurately. There would be no way Sony would know Walmart only need 20 when they order 50. Walmart have very sophisticted demand forecasting and would only order what they believe demand to be - and unlike Sony - who would only see total orders from Walmart - Walmart themselves would have accurate inventory/sales information for each store/warehouse.
Obviously your description of undershipping is correct.
EDIT - also, OT there are thousands of stores stocking these products. At any one time I can guarantee I could find a store with zero Kinects and lots of Move and another store with zero Move and lots of Kinects. People need to stop trying to extrapolate too much from too small a data sample. A couple of local stores only tells you about local demand/trends, nothing overall.
Try to be reasonable... its easier than you think...







