Optimal Replenishment Policy for Special Display Goods with Ramp-type Demand Rate

The present study discusses the retailer’s optimal replenishment policy for seasonal products with a ramp-type demand pattern. In this study, we focus on “Special Display Goods”, which are heaped up in end displays or special areas at retail store. They are sold at a fast velocity when their quantity displayed is large, but are sold at a low velocity if the quantity becomes small. We develop the model with a finite time horizon (period of a season) to determine the optimal replenishment policy, which maximizes the retailer’s total profit. Numerical examples are also presented to illustrate the theoretical underpinnings of the proposed model.