P&G proposed that the retailer inventory diaper products in the chain's distribution
warehouse, provide P&G with daily data on warehouse orders received from the stores, and allow
P&G to use the daily warehouse shipment data to determine warehouse replenishment volumes
needed. This new replenishment process would limit the retailer's warehouse inventory to
acceptable levels, eliminate costly LTL (less-than-truckload) shipments, and reduce stockouts for
retail stores. Both P&G and the retailer would benefit by reducing costs and increasing sales. Sales
increases would result from lower retail prices enabled by lower costs and from providing better
service to consumers through greater product availability.