Allocation and replenishment

Allocation pushes an initial quantity to each store, usually on a model that weights store volume, historical performance by size and category, and local demand signals. Done well it puts the right size curve in each door; done badly it distributes the average everywhere, which guarantees that some stores run out of the middle while others hold the ends.

This is where a size composition problem first becomes visible operationally, before it appears in any financial statement. See the size curve.

Replenishment refills what sells, and it only works for merchandise the retailer can reorder. Fashion product is typically allocated once and never replenished, which means allocation errors in fashion are permanent while errors in basics can be corrected weekly.

The practical consequence: the categories where a bad plan hurts most are precisely the ones where there is no second chance.

The residue that eventually reaches the off-price channel is shaped by these decisions, not just by the original buy. A chain that allocates poorly generates a more distorted leftover assortment than one that allocates well, which is one reason lots from different sellers behave differently even at similar prices.