Managing Inventory Over a Short Season: Models with Two Procurement Opportunities
Manufacturing & Service Operations Management
OR FORUM--Rocket Science Retailing: The 2006 Philip McCord Morse Lecture
Operations Research
Quick Response and Retailer Effort
Management Science
Manufacturing & Service Operations Management
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We consider the problem of determining (for a short lifecycle) retail product initial and replenishment order quantities that minimize the cost of lost sales, back orders, and obsolete inventory. We model this problem as a two-stage stochastic dynamic program, propose a heuristic, establish conditions under which the heuristic finds an optimal solution, and report results of the application of our procedure at a catalog retailer. Our procedure improves on the existing method by enough to double profits. In addition, our method can be used to choose the optimal reorder time, to quantify the benefit of leadtime reduction, and to choose the best replenishment contract.