Demand-based on-shelf availability

We investigate the value of accounting for demand seasonality in inventory control. We consider a single-location, single-item periodic-review lost sales inventory problem with cyclic demand in a retail environment. Customer demand has seasonality with a known season length, the lead time is shorter than the review period, and orders are placed as multiples of a fixed batch size. Our cost structure comprises a fixed cost per order, a fixed cost per batch and a variable cost per unit, which are used to model retail handling costs. We consider four different settings which differ in the degree of demand seasonality that is incorporated in the model: with or without within-review period variations and with or without across-review periods variations. In each case, we calculate the policy which minimizes the long-run average cost and compute the optimality gaps of the policies which ignore part or all demand seasonality. We apply the problem to a real life setting, using Point-of-Sales data. We find that it is most beneficial to incorporate demand seasonality for high-velocity products with low batch size for which demand across-review periods varies substantially.

Recent research that has applied service-dominant (S-D) logic to supply chain management (SCM) neglects SCM's prime objective to "deliver as promised" which is a core concept in the literature on logistics service quality and on-shelf availability. Addressing this, the paper proposes that mismatches in spatio-temporal availability may (1) render service-exchange and the co-creation of value impossible, (2) epitomize an enterprises' value propositions, and (3) attenuate value. The paper extends S-D logic to incorporate value-creation through spatio-temporal resource integration as a foundational premise. It implies that companies should focus on when and where they can assist their customers' own value-creation

This research seeks to improve retail on-shelf availability by understanding intraday sales patterns and integrating these into inventory policies by refitting the review period. Conceptually, it applies service-dominant logic, a new structuring theory from marketing. Empirically, it analyzes intraday retail transaction data.