Retail inventory management with stock-out based dynamic demand substitution

Retail Out-Of-StOck ManageMent: an OutcOMe-BaSed appROach

Estimation of Consumer Demand with Stock-Out Based Substitution: An Application to Vending Machine Products

The occurrence of temporary stock-outs at retail is common in frequently purchased product categories. Available empirical evidence suggests that when faced with stock-outs, consumers are often willing to buy substitute items. An important implication of this consumer behavior is that observed sales of an item no longer provide a good measure of its core demand rate. Sales of items that stock-o...

Dynamic Inventory Management with Learning About the Demand Distribution and Substitution Probability

A result in the Bayesian inventory management literature is: If lost sales are not observed, the Bayesian optimal inventory level is larger than the myopic inventory level (one should “stock more” to learn about the demand distribution). This result has been proven in other studies under the assumption that inventory is perishable, so the myopic inventory level is equal to the Bayesian optimal ...

Dynamic Inventory Planning with Unknown Costs and Stochastic Demand

Generally ordering policies are done by two methods, including fix order quantity (FOQ) and fix order period (FOP). These methods are static and either the quantity of ordering or the procedure of ordering is fixing in throughout time horizon. In real environments, demand is varying in any period and may be considered as uncertainty. When demand is variable in any period, the traditional and st...

Fixed versus Random Proportions Demand Models for the Assortment Planning Problem under Stock-out based Substitution

We consider the problem of determining the optimal assortment of products to offer in a given product category when each customer is characterized by a type, which is a list of products he is willing to buy in decreasing order of preference. We assume consumer-driven, dynamic, stock-out based substitution and random proportions of each type. No efficient method to obtain the optimal solution fo...