Estimating Lost Sales for Substitutable Products with Uncertain On-Shelf Availability

Problem definition: We address the problem of how to estimate lost sales for substitutable products when there is no reliable on-shelf availability (OSA) information. Academic/practical relevance: We develop a novel approach to estimating lost sales using only sales data, a market share estimate, and an estimate of overall availability. We use the method to illustrate the negative consequences of using potentially inaccurate inventory records as indicators of availability. Methodology: We suggest a partially hidden Markov model of OSA to generate probabilistic choice sets and incorporate these probabilistic choice sets into the estimation of a multinomial logit demand model using a nested expectation-maximization algorithm. We highlight the importance of considering inventory reliability problems first through simulation and then by applying the procedure to a data set from a major U.S. retailer. Results: The simulations show that the method converges in seconds and produces estimates with similar or lower bias than state-of-the-art benchmarks. For the product category under consideration at the retailer, our procedure finds lost sales of around 3.0% compared with 0.2% when relying on the inventory record as an indicator of availability. Managerial implications: The method efficiently computes estimates that can be used to improve inventory management and guide managers on how to use their scarce resources to improve stocking execution. The research also shows that ignoring inventory record inaccuracies when estimating lost sales can produce substantially inaccurate estimates, which leads to incorrect parameters in supply chain planning.

1.79-Approximation Algorithms for Continuous Review Single-Sourcing Lost-Sales and Dual-Sourcing Inventory Models

Stochastic inventory systems with lead times are often challenging to optimize, including single-sourcing lost-sales and dual-sourcing systems. Recent numerical results suggest that capped policies demonstrate superior performance over existing heuristics. However, the superior performance lacks a theoretical foundation. In “1.79-Approximation Algorithms for Continuous Review Single-Sourcing Lost-Sales and Dual-Sourcing Inventory Models,” the author provides a theoretical foundation for this phenomenon in two classical inventory models. First, in a continuous review lost-sales model with lead times and Poisson demand, he proves that a capped base-stock policy has a worst-case performance guarantee of 1.79 by conducting an asymptotic analysis under a large penalty cost and lead time. Second, in a more complex continuous review dual-sourcing model with general lead times and Poisson demand, he proves that a similar capped dual-index policy has a worst-case performance guarantee of 1.79 under large lead time and ordering cost differences. The results provide a deeper understanding of the superior numerical performance of capped policies and present a new approach to proving worst-case performance guarantees of simple policies in hard inventory problems.

Analysis of make-to-stock queues with general processing times and start-up and lost sales costs

We consider a make-to-stock environment with a single production unit that corresponds to a single machine or a line. Production and hence inventory are controlled by the two-critical-number policy. Production times are independent and identically distributed general random variables and demands are generated according to a stationary Poisson process. We model this production-inventory system as an M/G/1 make-to-stock queue. The main contribution of the study is to extend the control of make-to-stock literature by considering general production times, lost sales and fixed production costs at the same time. We characterize the long-run behaviour of the system and also propose a simple but very effective approximation to calculate the control parameters of the two-critical-number policy. An extensive numerical study exhibits the effects of the production time distribution and the system parameters on the policy control levels and average system cost.

ANALISIS PERANCANGAN E-COMMERCE TART & CAKE FAFA CHEESE BERBASIS WEB

This study discusses about e-commerce analysis and design at the Fafa Cheese shop. The sales system is still done manually, monthly data reports are still done in recording into a book which can lost sales reports, and there is no price information and tart sold, it is necessary to have the delivery status of the tart sold. The development of this sales information system uses the waterfall development system. This study aims to design an online cake sales application, provide information about prices and cakes sold and provide information that cakes have been sent to customers. The results of this study are the creation of e-commerce design, making it easier to make monthly reports, the availability of price information and cakes sold, and the status of cake delivery if the cake has been sent to the customer.

PENGENDALIAN PERSEDIAAN BAHAN BAKU MINYAK SAWIT DENGAN MENGGUNAKAN METODE CONTINUOUS (Q) DAN PERIODIC (P) REVIEW DI PT. XYZ

PT. Wilmar Nabati Indonesia,Tbk merupakan perusahaan industri agribisnis yang bergerak dalam bidang jasa pengolahan minyak mentah dengan kegiatan utamanya memproduksi minyak sawit. Berdasarkan sumber dari perusahaan, kerap mengalami kendala dalam pengendalian persediaan bahan baku minyak sawit, khususnya pada Bleaching Earth dan Phosphoric Acid yang disebabkan oleh kurangnya antisipasi dalam perencanaan dan pemenuhan jumlah permintaan konsumen yang berfluktuasi (probalistik) dan jangka waktu pemesanan yang tidak tetap karena adanya penyesuaian dari permintaan konsumen yang belum terencana dengan baik sehingga sering mengalami kekurangan persediaan yang menyebabkan permintaan konsumen tidak terpenuhi serta kelebihan kapasitas persediaan di berbagai gudang penyimpanan. Tujuan dari penelitian yang dilakukan adalah untuk menentukan pengendalian persediaan bahan baku minyak sawit untuk meminimasi total biaya persediaan di perusahaan. Metode yang digunakan adalah metode Continuous (Q) dan Periodic (P) Review. Hasil perhitungan didapatkan total biaya persediaan minimum adalah dengan metode Continuous Review (Q) Lost Sales sebesar Rp .740.144.076 dengan metode perusahaan sebesar Rp. 764.998.500 sehingga penghematan biaya sebesar Rp. 24.854.424 dengan presentase penghematan biaya sebesar 4%. Jumlah pemesanan Bleaching Earth per pesan bulan April 2021-Maret 2020 sebesar 68 kg dan Phosphoric Acid per pesan bulan April 2021-Maret 2022 sebesar 36 ton dengan total biaya persediaan sebesar Rp. 790.430.247,-.

Retail Workforce Sizing Strategy for Enhancing Service Delivery and Store Performance

The retail workforce is a strategic lever of the retailer for improving sales growth, market share, and profitability. With optimal retail workforce sizing and structure, customers would get prompt sales assistance and service, shelves should be replenished in a timely manner, store employees should be neither idle nor overstretched, and compensation costs should be managed effectively. Undersizing may hurt retailers in the long run as it affects merchandising capability and customer services, which ultimately hurt store sales and profits. Retail workforce optimization keeps store employees happy, improves customer service, and reduces opportunity costs of lost sales. The research provides various frameworks that outline the impact of undersizing in retail stores on sales and profitability and provides a methodology to determine the optimal workforce size. The research also provides an illustration with various scenarios to investigate whether a retail store is understaffed and calculates the financial impact of undersizing on revenue and profitability.

Analisis Kebijakan Persediaan Dengan Model Q Kasus Lost Sale di PT Grand Textil Industry Bandung

Permintaan kain paris yang terdiri dari bahan baku Benang Pakan 150/D dan Benang Lusi 75/D PT Grand Textil Industry adalah produsen tekstil bersifat probabilistik. Pelanggan tidak bersedia menunggu jika stok barang yang diminta tidak tersedia dan akan beralih ke produsen lainnya sehingga akan terjadi lost sales. Tujuan penelitian ini yaitu menentukan kebijakan persediaan Benang Pakan 150/D dan Benang Lusi 75/D yang optimal dengan permintaan probabilistik dan meminimasi risiko lost sale. Kebijakan persediaan dengan penetapan pemesanan optimal (Q*) sebesar 3.137 kg untuk benang Pakan 150/D dan 2.562 kg untuk benang Lusi 75/D akan meminimasi total ongkos persediaan tahunan untuk kedua jenis bahan baku ini. Penetapan reorder point yang optimal (r*) yaitu 414 kg untuk benang Pakan 150/D dan 280 kg untuk benang Lusi 75/D, akan menjamin bahwa barang akan datang sesuai lead time dan probabilitas kecepatan konsumsi bahan baku, sehingga kekurangan persediaan dapat diminimasi. Penetapan kebijakan safety stock sebesar untuk 37 kg benang Pakan 150/D dan 238 kg untuk benang Lusi 75/D berguna untuk mengantisipasi kekurangan persediaan akibat konsumsi bahan baku yang probabilistik.