You are Elise Trammell, Director of Logistics and Supply Chain at Volunteer Outdoor Equipment Co., a camping-gear maker in Knoxville, Tennessee. Your best-selling tent is out of stock, US$22 million of old product sits in your warehouses, and before you redesign anything you must decide how to sort the catalogue. The plan goes to the board in five weeks.
The situation
Monday, 13 April 2026. Two reports landed overnight. The first is a stockout list: the Ridgeline 2P, a performance tent whose sales tripled in three weeks after an influencer featured it, is filling only 61% of retailers' orders. The second is an aging report: US$22 million of classic tents and daypacks sitting in Knoxville and Reno, facing a 20% to 30% markdown if they are not cleared before next season. Overall fill rate has dropped to 82% against a 95% target, and finance puts full-margin demand going unserved this quarter at about US$14 million.
The company books US$540 million at a 38% gross margin. About 60% of volume is basics, whose demand barely moves from year to year and whose buyers compare prices to the dollar; the rest is performance and seasonal gear, short-lived, launch-driven and carrying the richest margins. All of it comes from one contract manufacturer in Vietnam, by ocean, on a 75-day lead time, ordered against a forecast. A port strike and a typhoon backlog have stretched that to about 115 days; you heard three weeks in, from a retailer's complaint. Making near-shore, in Mexico or the United States, would cost roughly 14% more.
Inventory stands at US$96 million. The credit line is US$110 million, drawn to US$98 million: US$12 million of room, and the bank says another month like this opens a conversation about the loan's terms. Tomás Delgado, in sourcing, argues that the Vietnam lane is the cheapest in the industry and that a strike is a bad quarter, not a design fault. Nadia Freels, in demand planning, answers that fill rate is the only number retailers ever see. And the chief executive, Wade Kessler, asks what you would say if the same thing happened next spring for a different reason. You built the Vietnam lane, and half your bonus moves with its cost per unit.