Publication:
Can the desired service level be achieved when the demand and lost sales are unobserved?

Thumbnail Image

School / College / Institute

Program

KU Authors

Co-Authors

Publication Date

Language

Embargo Status

NO

Journal Title

Journal ISSN

Volume Title

Alternative Title

Abstract

In this paper we consider an inventory management problem in the retail industry with unobserved lost sales. The retailer does not know the demand for a particular product but she has access to Point-Of-Sale (POS) data. The retailer uses a fixed review period, order-up-to level system to control the inventory. The objective of the retailer is to achieve a pre-specified service level. We define the service level as the fraction of demand satisfied from inventory. However, due to the unobserved lost sales nature of the problem, the retailer cannot exactly measure the current service level. We propose a POS data-based mechanism for periodic updating of the order-up-to level. We show that the periodic updating approach yields the desired service level without using any inventory information. Once the periodic updating scheme converges, it also gives the actual demand distribution.

Source

Publisher

Institute of Electrical and Electronics Engineers (IEEE)

Subject

Business and economics, Economics

Citation

Has Part

Source

IIE Transactions

Book Series Title

Edition

DOI

10.1080/07408170490279589

item.page.datauri

Link

Rights

Copyrights Note

Endorsement

Review

Supplemented By

Referenced By

0

Views

6

Downloads

View PlumX Details