A simulation-based approach for obtaining optimal order quantities of short-expiration date items at a retail store

Haixia Sang; Soemon Takakuwa

doi:10.1109/WSC.2012.6465063

A simulation-based approach for obtaining optimal order quantities of short-expiration date items at a retail store

Haixia Sang^*, Soemon Takakuwa

^*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution

Abstract

The uncertain demand of expiration-dated item often leads to scrap losses or opportunity losses, which result in resource wasting and the degradation of customer satisfaction. In this paper, a well known exponential smoothing method was modified to forecast the hourly demand of rice balls, by utilizing the concept of the newsvendor problem, and a simulation model was constructed to simulate the scrap loss and opportunity loss changes. The optimal order quantity's characteristics, which can maximize the retailer's expected profit, were clarified by using OptQuest and sensitivity analysis. The proposed approach was applied to a real store to confirm its effectiveness.

Original language	English
Title of host publication	Proceedings of the 2012 Winter Simulation Conference, WSC 2012
DOIs	https://doi.org/10.1109/WSC.2012.6465063
Publication status	Published - 2012 Dec 1
Externally published	Yes
Event	2012 Winter Simulation Conference, WSC 2012 - Berlin, Germany Duration: 2012 Dec 9 → 2012 Dec 12

Other

Other	2012 Winter Simulation Conference, WSC 2012
Country/Territory	Germany
City	Berlin
Period	12/12/9 → 12/12/12

ASJC Scopus subject areas

Software
Modelling and Simulation
Computer Science Applications

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10.1109/WSC.2012.6465063

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title = "A simulation-based approach for obtaining optimal order quantities of short-expiration date items at a retail store",

abstract = "The uncertain demand of expiration-dated item often leads to scrap losses or opportunity losses, which result in resource wasting and the degradation of customer satisfaction. In this paper, a well known exponential smoothing method was modified to forecast the hourly demand of rice balls, by utilizing the concept of the newsvendor problem, and a simulation model was constructed to simulate the scrap loss and opportunity loss changes. The optimal order quantity's characteristics, which can maximize the retailer's expected profit, were clarified by using OptQuest and sensitivity analysis. The proposed approach was applied to a real store to confirm its effectiveness.",

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N2 - The uncertain demand of expiration-dated item often leads to scrap losses or opportunity losses, which result in resource wasting and the degradation of customer satisfaction. In this paper, a well known exponential smoothing method was modified to forecast the hourly demand of rice balls, by utilizing the concept of the newsvendor problem, and a simulation model was constructed to simulate the scrap loss and opportunity loss changes. The optimal order quantity's characteristics, which can maximize the retailer's expected profit, were clarified by using OptQuest and sensitivity analysis. The proposed approach was applied to a real store to confirm its effectiveness.

AB - The uncertain demand of expiration-dated item often leads to scrap losses or opportunity losses, which result in resource wasting and the degradation of customer satisfaction. In this paper, a well known exponential smoothing method was modified to forecast the hourly demand of rice balls, by utilizing the concept of the newsvendor problem, and a simulation model was constructed to simulate the scrap loss and opportunity loss changes. The optimal order quantity's characteristics, which can maximize the retailer's expected profit, were clarified by using OptQuest and sensitivity analysis. The proposed approach was applied to a real store to confirm its effectiveness.

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A simulation-based approach for obtaining optimal order quantities of short-expiration date items at a retail store

Abstract

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