H&M has adopted the inventory management system that delivers less merchandise on a more frequent basis than in traditional inventory systems. The firm gets the merchandise just in time for it to be used in the manufacture of another product or for sale when the customer wants it. This is an example of a inventory system.

A. Cross-docking
B. Quick response (QR)
C. UPC
D. EDI
E. Lead time

The correct answer is the option B: Quick response (QR)

Explanation:

To begin with, a quick response inventory system involves the intention of shorten the lead time from receiving an order to delivery of the products and increase the amount of cash flow. Moreover, this system focuses primarily in the reduction of the time that the stuff is stuck in the inventory in order to avoid the low stock rotation and in that way to try to increase the sales that the company has. And in that way the company can receive the merchandise in time in order to sale it or to use it for another product.

B) Quick response (QR)  or Just in Time (JIT)

Explanation:

This is a just in time (JIT) inventory management method, or Toyota system, whichever we want to use. Toyota developed it during the 1970s and they are extremely efficient with. It greatly reduces total costs by lowering inventory costs. I once visited a Toyota pickup and it is really amazing how their total inventory of engines was 4, and they produced over 150,000 trucks per year. All they had was 4 engines at hand, imagine they work 365 days a year, so that means that they finish 411 trucks per day.

The system s not only based on having a small inventory, the whole production process flows seamlessly and every working station was the same. They also required that their suppliers work coordinately and in a similar fashion. Imagine inventory holding costs are virtually 0 and they barely have any inventory.

This is one of the reasons why Japanese manufacturers, all use some type of JIT manufacturing now, are able to provide high quality cars at much lower prices. Other industries also try to replicate that model, some more successfully than others. The only downside is that if something goes wrong, remember the tsunami a few years ago in Japan, the whole process stops immediately since there is no "just in case" inventory.