According to McGraw-Hill, they gave bookstores several years to resolve inventory issues before actually implementing the revised return policy. This shows that McGraw-Hill expects B&N to change its behavior and be able to accurately order the exact number of textbooks it needs. It didn't happen, that's why there is conflict. Perceptual differences exist when different channel members perceive the same stimuli but give quite different interpretations. In this case, B&N orders the textbooks based on the number of students it believes will come to purchase them. However, demographic conditions make these estimates difficult. McGraw-Hill believes there is no need to keep such large inventories at the retail level. Goal incompatibilities can also cause conflict. In fact, McGraw-Hill believes that B&N orders large quantities of new textbooks simply as insurance in case they don't have enough used books available to sell. The case does not say that that is the B&W objective but if this is true there is a problem of incompatibility of the objective between the two channels