Two-stage replenishment policies for deteriorating items at Taiwanese convenience stores

Publication year: 2012
Source: Computers & Operations Research, Volume 39, Issue 2, February 2012, Pages 328-338

Po-Chien, Tsai , Jia-Yen, Huang

In the past decade, convenience stores have generally experienced low profit margins due to the intensive competition that exists in the industry. To reduce operating costs, these stores must be able to efficiently control their stock replenishment, especially for deteriorating items such as meal-boxes. To solve this problem, we employed a two-step model to determine the optimal amount of replenishment. In the first step, we obtained the basic reorder quantity by considering three inventory management methods involving the consideration of the probability forecast of demand, hypothesis testing and the newsboy method. In the second step of our model, a novel…