Retail Assortment, Shelf Space and Inventory Management with Stochastic Demand and Dynamic Substitution PDF Download
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Author: Sabine Rättig
Publisher:
ISBN:
Category :
Languages : en
Pages : 128
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Book Description
Author: Sabine Rättig
Publisher:
ISBN:
Category :
Languages : en
Pages : 128
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Book Description
Author: Lijue Lu
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Single-period dynamic assortment planning involves the retailer's decision of selecting a set of products to offer and determining their initial inventory levels, considering stochastic demand and dynamic substitution. The objective is to maximize the expected revenue, subject to a capacity constraint on the total number of stocked products. This problem is notoriously difficult to solve, and existing literature offers effective heuristics. However, these heuristics are primarily designed for small-scale problems faced by brick-and-mortar retailers, where the capacity is generally limited due to shelf-space constraints. In contrast, online retailers often have much larger capacity levels, necessitating novel approaches. In this study, we introduce the first heuristic capable of handling large-scale dynamic assortment planning problems encountered by online retailers. Our approach is able to tackle scenarios with hundreds of thousands of customer arrivals, a capacity of thousands of units, and a wide range of product varieties. Moreover, our algorithm is relatively simple, making it more implementable in practice. To evaluate the effectiveness of our algorithm, we conduct extensive numerical experiments covering various customer types and scenarios. For small-scale problems (maximum of 200 customer arrivals), our approach achieves comparable revenue performance to the state-of-the-art approach while providing a significant speed advantage, being 30 times faster on average. As the problem size increases, the benefits of our algorithm become even more evident. For medium-sized problems (maximum of 1000 customer arrivals), our algorithm outperforms in both revenue and computational speed. While the state-of-the-art approach requires an average of 86 seconds, our algorithm produces superior revenues in just 0.3 seconds, on average. Real-world problems faced by online retailers may involve hundreds of thousands of customer arrivals, further highlighting the need for efficient and effective solutions. To illustrate the practical applicability of our approach, we apply it to a case study based on the online home goods retailer Wayfair. On average, our algorithm returns a solution in less than 80 seconds, while we had to stop the state-of-the-art algorithm after 24 hours. The revenue performance of our approach is on average 2.57 times better than that of the state-of-the-art approach in this case study.
Author: Jing-Sheng J. Song
Publisher: Edward Elgar Publishing
ISBN: 180037710X
Category : Technology & Engineering
Languages : en
Pages : 565
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Book Description
This comprehensive Handbook provides an overview of state-of-the-art research on quantitative models for inventory management. Despite over half a century’s progress, inventory management remains a challenge, as evidenced by the recent Covid-19 pandemic. With an expanse of world-renowned inventory scholars from major international research universities, this Handbook explores key areas including mathematical modelling, the interplay of inventory decisions and other business decisions and the unique challenges posed to multiple industries.
Author: Alexander Hübner
Publisher: Springer Science & Business Media
ISBN: 3642224776
Category : Business & Economics
Languages : en
Pages : 172
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Book Description
Retail shelf management means cost-efficiently aligning retail operations with consumer demand. As consumers expect high product availability and low prices, and retailers are constantly increasing product variety and striving towards high service levels, the complexity of managing retail business and its operations is growing enormously. Retailers need to match consumer demand with shelf supply by balancing variety (number of products) and service levels (number of items of a product), and by optimizing demand and profit through carefully calibrated prices. As a result the core strategic decisions a retailer must make involve assortment sizes, shelf space assignment and pricing levels. Rigorous quantitative methods have emerged as the most promising solution to this problem. The individual chapters in this book therefore focus on three areas: (1) combining assortment and shelf space planning, (2) providing efficient decision support systems for practically relevant problem sizes, and (3) integrating inventory and price optimization into shelf management.
Author: Vineet Goyal
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Assortment planning of substitutable products is a major operational issue that arises in many industries, such as retailing, airlines and consumer electronics. We consider a single-period joint assortment and inventory planning problem under dynamic substitution with stochastic demands, and provide complexity and algorithmic results as well as insightful structural characterizations of near-optimal solutions for important variants of the problem. First, we show that the assortment planning problem is NP-hard even for a very simple consumer choice model, where each customer is willing to buy only two products. In fact, we show that the problem is hard to approximate within a factor better than 1-1/e. Secondly, we show that for several interesting and practical choice models, one can devise a polynomial-time approximation scheme (PTAS), i.e., the problem can be solved efficiently to within any level of accuracy. To the best of our knowledge, this is the first efficient algorithm with provably near-optimal performance guarantees for assortment planning problems under dynamic substitution. Quite surprisingly, the algorithm we propose stocks only a constant number of different product types; this constant depends only on the desired accuracy level. This provides an important managerial insight that assortments with a relatively small number of product types can obtain almost all of the potential revenue. Furthermore, we show that our algorithm can be easily adapted for more general choice models, and present numerical experiments to show that it performs significantly better than other known approaches.
Author: Uday Apte
Publisher: Springer Science & Business Media
ISBN: 0387342141
Category : Business & Economics
Languages : en
Pages : 475
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Book Description
This book presents recent research directions that address management in the information economy. The contributors include leading researchers with interests in a diverse set of topics who highlight important areas and point to some important topics for future research. The book begins with perspectives at the level of the economy as a whole and then progressively addresses industrial structure, sectors, functions, and business practices.
Author: Uday Apte
Publisher: Springer Science & Business Media
ISBN: 0387368922
Category : Business & Economics
Languages : en
Pages : 475
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Book Description
This book presents recent research directions that address management in the information economy. The contributors include leading researchers with interests in a diverse set of topics who highlight important areas and point to some important topics for future research. The book begins with perspectives at the level of the economy as a whole and then progressively addresses industrial structure, sectors, functions, and business practices.
Author: Mahya Hemmati
Publisher: CRC Press
ISBN: 1000406970
Category : Technology & Engineering
Languages : en
Pages : 248
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Book Description
In today’s competitive markets, considering the demand and the supply chain sides is crucial to keeping revenue and customer satisfaction maximized. Managing and planning demand play a vital role in the sustainability of a company. This is the first book to the discuss managerial, mathematical, and conceptual framework of influencing factors on demand along with accurate mathematical analyses to evaluate and raise revenue. The book provides an understanding of the key elements that impact buyer demand. It presents the mathematical relationship between the influencing factors and the demand functions. It discusses the methods used for inspiring demand, how to measure demand dependency on components such as price, quality, and inventory, and it helps management improve alignment between supply and demand by affecting the level and understanding of the role within supply chain management (SCM). This book is applicable for the professional as well as for academia. It can help those working in SCM, project management, production, inventory control, scheduling, engineering management, retail management, and operations management.
Author: Narendra Agrawal
Publisher: Springer
ISBN: 1489975624
Category : Business & Economics
Languages : en
Pages : 454
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Book Description
This new edition focuses on three crucial areas of retail supply chain management: (1) empirical studies of retail supply chain practices, (2) assortment and inventory planning and (3) integrating price optimization into retail supply chain decisions. The book has been fully updated, expanding on the distinguishing features of the original, while offering three new chapters on recent topics which reflect areas of great interest and relevance to the academic and professional communities alike - inventory management in the presence of data inaccuracies, retail workforce management, and fast fashion retail strategies. The innovations, lessons for practice, and new technological solutions for managing retail supply chains are important not just in retailing, but offer crucial insights and strategies for the ultimate effective management of supply chains in other industries as well. The retail industry has emerged as a fascinating choice for researchers in the field of supply chain management. It presents a vast array of stimulating challenges that have long provided the context of much of the research in the area of operations research and inventory management. However, in recent years, advances in computing capabilities and information technologies, hyper-competition in the retail industry, emergence of multiple retail formats and distribution channels, an ever increasing trend towards a globally dispersed retail network, and a better understanding of the importance of collaboration in the extended supply chain have led to a surge in academic research on topics in retail supply chain management. Many supply chain innovations (e.g., vendor managed inventory) were first conceived and successfully validated in this industry, and have since been adopted in others. Conversely, many retailers have been quick to adopt cutting edge practices that first originated in other industries. Retail Supply Chain Management: Quantitative Models and Empirical Studies, 2nd Ed. is an attempt to summarize the state of the art in this research, as well as offer a perspective on what new applications may lie ahead.
Author: Anna-Lena Sachs
Publisher: Springer
ISBN: 3319133055
Category : Business & Economics
Languages : en
Pages : 126
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Book Description
This book addresses the challenging task of demand forecasting and inventory management in retailing. It analyzes how information from point-of-sale scanner systems can be used to improve inventory decisions, and develops a data-driven approach that integrates demand forecasting and inventory management for perishable products, while taking unobservable lost sales and substitution into account in out-of-stock situations. Using linear programming, a new inventory function that reflects the causal relationship between demand and external factors such as price and weather is proposed. The book subsequently demonstrates the benefits of this new approach in numerical studies that utilize real data collected at a large European retail chain. Furthermore, the book derives an optimal inventory policy for a multi-product setting in which the decision-maker faces an aggregated service level target, and analyzes whether the decision-maker is subject to behavioral biases based on real data for bakery products.
