Open AccessEconomic benefits of midseason reordering in apparel retailing
Author(s) -
Ann Lamont,
H A Elayat
Publication year - 1995
Language(s) - English
Resource type - Reports
DOI - 10.2172/574821
Subject(s) - order (exchange) , value (mathematics) , clothing , operations research , process (computing) , range (aeronautics) , dynamic programming , computer science , mathematical optimization , microeconomics , economics , mathematics , statistics , engineering , geography , archaeology , finance , aerospace engineering , operating system
This report presents a method for determining the value of reordering, explores factors that affect its value, and provides an estimate of the value under a range of conditions. The method is based on a stochastic process model of the demands the retailer faces. It uses a dynamic programming model to determine the optimal quantities to order and the expected profits. The analysis shows that the benefits of reordering are quite sensitive to the uncertainties in the demand and to the assumptions about the markdown of unsold merchandise at the end of the season