Author(s)

Yulong Yang

Corresponding Author

Yulong Yang

ABSTRACT

A fast-fashion system combines quick response manufacturing capabilities with better product design skills to create new items that capture the newest consumer trends while also taking advantage of short production lead times to balance supply with fluctuating demand. This research builds a model of such a system and compares it to three other systems: quick-response, improved design, and traditional. According to this study, improving design helps to reduce strategic behavior by providing customers with a product they value higher, making them less eager to wait for a clearance sale and maybe suffering a stockout. Quick reaction mitigates strategic behavior through a different mechanism: it minimizes the likelihood of a clearance sale by better matching supply to demand. Most crucially, this study discovers that, while rapid reaction and improved design might be complementary or substitutive, the complementarity effect tends to win out. As a result, when both quick response and enhanced design are integrated in a fast fashion system, the company often sees a bigger incremental improvement in profit than if each method were used separately.

KEYWORDS

Game Theory, Fast Fashion, Quick Response