After conducted further analysis it was determined that while the demand for the new products increased dramatically in the market, just after their launch, it tended to steady out in the succeeding weeks, coming down to levels where the company could easily satisfy all the orders coming in for the new products. This helped in revealing that speculative behavior was occurring in the market on the part of the warehousing businesses.
The clients of the Meditech Company tended to stock up on the new products and placed orders for high volume and amount of the products in order to ascertain that the company would fulfill part of the orders in case the delivery time was delayed or the demand in the market suddenly increased for the products. This was a proactive measure on the part of the warehousing and inventory based businesses, but it had repercussions on the image and the reputation of the Meditech Company as it was unable to fulfill the suddenly large orders being placed by the clients of the company. The main cause of the stock outs for the new products was the improper demand forecasting, not researching and observing the behavior of the warehousing and inventory based businesses in terms of the size of their orders as well as the lack of coordination and supply china management system between the company and its distribution network both in America as well as in the international market (Dion, et al 1991).