A Seasonal Shelf Space Reorder Model Decision Support System

<p>The traditional newsvendor model results in a decision to reorder an item whenever the expected profit from the reorder is positive. Candidates for reorder include all items selling more quickly than had been anticipated during preseason forecasts and ordering. Retailers must also decide how to allocate shelf space in order to optimize store profit; any item reordered must be the most profitable option among all items competing for the same shelf space. Overall store profit calculations must incorporate the impact on sales of related items, the cost of stock outs, and characteristics of the reordered item. Seasonal products’ abbreviated sales windows and style products’ short life cycles add urgency and complexity to the reorder decision. Lack of product availability may limit how much of the most profitable item can be ordered; in these cases, the next most profitable item is the most likely candidate for the remaining available shelf space.</p><p>In this paper we extend the work of Corstjens and Doyle (1981) and Gallego and Moon (1993) and develop a model encompassing each of these elements: the newsvendor reorder decision, seasonal goods, style goods, multiple discounts, shortage costs, expediting, and shelf space allocation incorporating cross product elasticity. The shelf space allocation is an extension of the knapsack problem requiring not only that the profit calculations include effects on sales of related items, but that the requisite space to hold these related items is available.</p><p>The model is implemented and validated as a decision support system (DSS). Corstjens and Doyle’s (1981), Gallego and Moon’s (1993), and the classic newsvendor models are also implemented in the DSS for comparison purposes. Scenario analysis, testing the model’s sensitivity of the decision to managers’ assumptions, is incorporated as are tools to derive the range of values for which the decision is valid.</p>

Name thesis:degree_name

PHD

Level thesis:degree_level

doctoral

Discipline thesis:degree_discipline

College of Business and Entrepreneurship, Ambassador Crawford / Department of Management and Information Systems

Grantor dc:publisher

Kent State University

Year dc:date

2010

Author dc:creator

• Horne, Susan Elaine

Contributors dc:contributor

• Troutt, Marvin

• Business Administration
• Information Systems
• Management
• Marketing
• shelf space
• newsvendor
• seasonality
• style goods
• fashion
• space elasticity
• cross product elasticity
• decision support system
• DSS
• simulation
• innovative products
• expert validation
• verification

Statement dc:rights

• unrestricted
• This thesis or dissertation is protected by copyright: all rights reserved. It may not be copied or redistributed beyond the terms of applicable copyright laws.

Language dc:language

English

Repository record dc:identifier

http://rave.ohiolink.edu/etdc/view?acc_num=kent1291086889

OAI identifier oai:identifier

oai:etd.ohiolink.edu:kent1291086889