Almost all multi-echelon inventory models assume that demand not satis ed immediately can be backordered. In some situations this assumption is not realistic. For example, it may be more representative to model stockouts as lost sales when the retailers are in a competitive market and customers can easily turn to another rm when purchasing the good. Assuming lost sales at the retailers, we cons...

This paper considers a continuous-review, single-product production-inventory system with a constant replenishment rate, compound Poisson demands and lost-sales. Two objective functions that represent metrics of operational costs are considered: (1) the sum of the expected discounted inventory holding costs and lost-sales penalties, both over an infinite time horizon, given an initial inventory...

We study the optimal policy for a serial inventory system under periodic review when excess demand at the retailer (i.e., the most downstream stage) is lost. We focus on “high service level environments” (i.e., systems where the cost of a lost sale is high compared to inventory holding costs). These environments are typical of products whose margins are high relative to their holding costs. Whe...

We reinterpret the structural analysis of Karlin and Scarf and Morton of the standard lost-sales inventory system. This version of the results is, we think, easier to work with than the original. We also recover their bounds on the optimal policy and derive new ones. Then, we show that more variable demand leads to higher cost. Finally, we extend the analysis to several important variations of ...

In this paper we use micro-level data on store traffic, sales and labor from 41 stores of a large retail chain to identify the extent of understaffing in retail stores and quantify its impact on sales and profitability. We show how traffic data can be leveraged in making staffing decisions through use of a structural model that captures the relationship between traffic, sales and labor. Assumin...

We consider two−echelon supply chains with one supplier and two retailers. Retailers are censored newsvendors facing general parametric demand distributions involving unknown parameters. Using a Bayesian MDP formulation, we investigate how the supplier can make use of the combined information gathered from the retailers’ sales data to increase channel pro ts. We compare among the following thre...

This paper considers a single-item, two-echelon, continuous-review inventory model. A number of retailers have their stock replenished from a central warehouse. The warehouse in turn replenishes stock from an external supplier. The demand processes on the retailers are independent Poisson. Demand not met at a retailer is lost. The order quantity from each retailer on the warehouse and from the ...

"Robustness of order-up-to policies in lost-sales inventory systems. Full terms and conditions of use:

a r t i c l e i n f o Keywords: Customer defection Customer reacquisition Win-back Business-to-business Customer relationship management Using a qualitative critical incident research technique, this paper examines how sales firms evaluate defected customers in order to determine their worthiness for reacquisition. Findings from interviews with fifty professional salespeople suggest that, when ...

This paper investigates the e ect of demand censoring on the optimal policy in newsvendor inventory models with general parametric demand distributions and unknown parameter values. We show that the newsvendor problem with observable lost sales reduces to a sequence of single-period problems while the newsvendor problem with unobservable lost sales requires a dynamic analysis. Using a Bayesian ...