Hightower Department Stores: Imported Stuffed Animals

13 Pages Posted: 21 Oct 2008

See all articles by Phillip E. Pfeifer

Phillip E. Pfeifer

University of Virginia - Darden School of Business

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Abstract

Julia Brown, toy buyer for the Hightower Department Stores, has to decide which of three imported stuffed animals will be offered for sale by the 16 Hightower stores during the approaching Christmas shopping season. The case is appropriately used as an introduction to the concepts of least squares and regression analysis. A linear relationship between realized and test-market sales can be used to forecast the sales potential of the three proposed animals, and an explicit treatment of the uncertainty in this forecast is necessary in order to decide how many of each adopted animal to order.

Excerpt

UVA-QA-0268

Rev. Apr. 15, 2013

HIGHTOWER DEPARTMENT STORES: IMPORTED STUFFED ANIMALS

On the morning of January 17, 1993, Julia Brown gathered together the past sales data on stuffed animals. As toy buyer for the chain of Hightower Department Stores, she knew that a careful review of the performance of the various models of stuffed animals sold during 1992 was necessary prior to her annual round-the-world buying trip in late January.

During the trip she would be buying all the imported toys that the Hightower chain would carry during the 1993 Christmas season. In particular, she would choose approximately 15 different types of bears, raccoons, elephants, and so on from the stuffed animals offered by various manufacturers in western Germany. These choices would be made after viewing what each manufacturer had to offer and then considering the overall attractiveness of the collection. She often made decisions fairly quickly, using the sound judgment she had gained through her many years of buying experience.

Brown knew that her major purchases would be from a company called Steiff, whose teddy bears Hightower had carried almost every year since they were first manufactured in Germany in 1903. She also had had experience with other manufacturers of stuffed animals and planned to reorder with them. But in choosing the last few animals for her assortment, Brown sometimes hedged her bets by ordering a minimum quantity of new models to test their sales potential. These test models were sold in only one store within the chain, and the results of the sales were then used to decide the fate of each toy for the succeeding year.

. . .

Keywords: forecasting, marketing research, regression analysis, statistics, uncertainty, diversity

Suggested Citation

Pfeifer, Phillip E., Hightower Department Stores: Imported Stuffed Animals. Darden Case No. UVA-QA-0268. Available at SSRN: https://ssrn.com/abstract=1283357

Phillip E. Pfeifer (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4803 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/Pfeifer.htm

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