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710. Integrated inventory-control method for multiple sales-promotion types
Invited abstract in session WD-50: Retail Optimization, stream Retail Operations.
Wednesday, 14:30-16:00Room: M2 (building: 101)
Authors (first author is the speaker)
| 1. | Naoko Miyashita
|
| Research and Development Group, Hitachi, Ltd. | |
| 2. | Junko Hosoda
|
| Research and Development Group, Hitachi, Ltd. | |
| 3. | TAKAHIRO NISHIKAWA
|
| LOGISTEED, Ltd. | |
| 4. | AKIRA KOYAMA
|
| LOGISTEED Solutions, Ltd. |
Abstract
In retail, sales promotion plays a key role in gaining a competitive advantage. Products are often sold by combining multiple sales-promotion types, e.g., regular sales, discounts, and coupons. Therefore, inventory control for multiple sales-promotion types has been attracting interest. Each promotion type for a product differs in its demands’ distribution and target service level. The inventory-policy variables for each promotion type are typically optimized individually to replenish the inventory separately. However, this separation method risks shortage and excess stock since the inventory is not shared among the promotion types. An integrated inventory-control method of the (s, S) policy for multiple sales-promotion types is proposed. The policy variables are calculated as follows. The required inventory is first calculated for each inventory type such as safe stock, pipeline stock and cycle stock. The policy variables are then calculated by summing the required inventory of each inventory type for all promotion types. This enables the sharing of inventory among promotion types and satisfies the target service level of each type, reducing shortages. By omitting the cycle stock while replenishing for promotion types with large uncertainty in demand, the excess stock due to forecast error is reduced. The results of numerical experiments indicate that the proposed method reduces shortage and excess stock compared with the conventional separation method.
Keywords
- Inventory
- Algorithms
- Supply Chain Management
Status: accepted
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