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4R Systems, Inc.

4R Systems, Inc. is a leading providerof software tools, analytical modelsand information services that helpretailers and manufacturers significantlyincrease profits by optimizingtheir inventory and related supplychain decisions.

Founded by leading academics Dr. Marshall Fisher of The Wharton School and Dr. Ananth Raman of Harvard Business School, 4R’s cutting-edge technologies leverage their groundbreaking research to help companies such as Crate and Barrel, Linens ‘n Things and Footstar improve inventory efficiency and drive profits to higher levels.

Profit Optimizing The Inventory Asset

Retailers increasingly need to lower costs to stay competitive. While gross margins range between 30 and 70 percent, pretax profits range only between 3 and 7 percent of sales, and supply chain and inventory inefficiency are a significant proportion of the difference. By optimizing supply chain profitability throughout the product life cycle, retailers have a significant opportunity to raise profits. 4R Systems’ models, analytics and people provide clients with the capabilities to better meet customer demand while also better managing their cost of fulfillment.

How We Deliver Results

From initial launch through replenishment to end of life, and for products ranging from short-lived fashion items to long-term staples, 4R provides retailers and manufacturers with solutions that fit their business. 4R clients have seen increases in profitability of 1 to 2 percent of sales due to higher sales levels on lowered inventory.

Benchmark to Quantify And Identify Opportunities

Inventory Productivity Benchmark IP^Mark

Applies 4R metrics to assess a retailer’s current inventory productivity and rigorously quantifies the opportunity that can be realized through profit-optimizing the inventory asset. The benchmark measures where a retailer is today: opportunity magnitude (replenishment, initial buy, exit optimization, testing); difficulty and risk; cost benefit; and opportunity prioritization.

Solutions to Optimally Align Information, Practices and Process – Driving Profitability Throughout the Product Life Cycle

Initial Buying

Right Buy – Optimizes initial order quantities and store allocations. Right Buy helps retailers balance the risks of lost sales and excess inventories by understanding the uncertainty in forecasts and linking that to a product’s profitability.

Testing

Right Test – Provides sophisticated analytics to recommend stores for a new product test. It monitors the tests and more accurately projects their results to the entire chain, allowing retailers to better predict the product’s success and drive more efficient purchasing through more accurate forecasts.

Replenishment

IP^Max – Maximizes inventory productivity by identifying the most profitable inventory level for each product in each store, or distribution center, for each day. By pumping IPMax’s profit-optimized stocking level into their existing systems, retailers and manufacturers are able to quickly improve profitability without costly system changes.

End-of-Life Management

– 4R’s next-generation markdown solution evaluates a wide range of options to maximize profitability at a product’s end of life. Before markdown, MaxOut focuses on aligning inventory levels with demand as end of life approaches in order to reduce the amount of excess inventory that needs disposition. As end of life nears, MaxOut identifies the path to most profits through optimized markdown pricing as well as consolidation/ rebalancing and liquidation.