University of Twente Student Theses
To Buy or not to Buy : A Thesis about Estimating and Accounting for Partial Substitution in Retail Inventory Management.
Kösters, D.M. (2023) To Buy or not to Buy : A Thesis about Estimating and Accounting for Partial Substitution in Retail Inventory Management.
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| Abstract: | This thesis introduces a model that can estimate and account for partial inventory-based substitution in the determination of order-up-to levels. This is started by discussing two methods for estimating the substitution parameter and the initial demand rate: one that tries to minimise weighted squared errors and one that uses MLE. The results of both methods are evaluated based on MAD, MAPE, and MAX criteria, and the method with the best performance is selected for further use in the model. Next, the approach for determining near-optimal order-up-to levels is outlined, which involves using the fill rate and inventory value in a greedy heuristic by iteratively increasing the order-up-to levels until a target fill rate is reached. This thesis concludes that accounting for partial substitution can be beneficial provided that some situational guidelines are adhered to. |
| Item Type: | Essay (Master) |
| Clients: | Slimstock B.V., Deventer, The Netherlands |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 31 mathematics, 85 business administration, organizational science |
| Programme: | Industrial Engineering and Management MSc (60029) |
| Link to this item: | https://purl.utwente.nl/essays/96802 |
| Export this item as: | BibTeX EndNote HTML Citation Reference Manager |
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