Петрова С. А. Розвиток роздрібного асортименту і його вплив на структурування

One of the key tasks of a retailer is to respond effectively to the requirements of the consumers. Here, the activities of research, formation, structuring, optimization, organization and development of the assortment are particularly important. These activities are subject to the strategy of the company and are based on the demand and needs. On its part, responding effectively to consumers implies the use of new approaches toward the overall assortment management. Such an approach, for example, is assortment structuring by commodity categories, as well as the related decisions to create, manage and evaluate the effectiveness of their assortment matrix, also called commodity portfolio.Modernretailershaveavariety of toolsenabling them to carry out analyses in the specific trends of the retail assortment. It is extremely important to duly assess the situation in the retail premises. Managers are faced withmakingcomplicated decisionsrelated tostrategy development, selection and formationof retail assortment,pricing, movement andpresentation of the goodsin the store.Retailassortment structuringis especially important among thisset ofdecisions. This paper aims to differentiate and specify the types of decisions the implementation of which as specific activities aids the studying and structuring of retail assortment, as well as its rational organization and development.Торговые менеджеры должны достаточно хорошо знать преимущества эффективной ассортиментной политики, т.к. одним из перспективных направлений экономического роста и повышения конкурентоспособности торговых предприятий является умелое решение проблем, проявляющихся в выделенной области. Основной принцип обслуживания потребителей сводится к расходу минимального количества времени и усилий с их стороны при покупке товаров или услуг. Раскрытие сущности этого принципа требует его интерпретирования в следующем направлении, связанном непосредственно с торговым предприятием, которое должно предлагать широкий ассортимент и подходящую глубину ассортимента с целью покупки в одном месте, осуществляемой по приемлемой цене; создать необходимые  условия для покупки, включая необходимость расположения в относительной близости до места жительства потребителя или  наличия хорошей и удобной транспортной доступности. Существенное значение для потребителя представляет предлагаемый ассортимент, т.е. если в торговом объекте не осуществится покупка, то все остальные элементы потребительского обслуживания могут остаться неоцененными.Основная цель предложенной разработки – рассмотреть и интерпретировать  сущность и основные особенности развития товарного ассортимента предприятия и на этой базе детерминировать ключевые решения,  которые в своей совокупности оказывают влияние на результаты осуществляемой торговой деятельности.Правильный выбор ассортимента обеспечивает торговому предприятию значимые конкурентные преимущества. Именно сложная природа этого выбора обуславливает исследовательский интересТоргові менеджери повинні достатньо добре знати переваги ефективної асортиментної політики, тому одним з перспективних напрямків економічного зростання та підвищення конкурентоспроможності торговельних підприємств є вміле вирішення проблем, що виявляються в виділеної області. Основний принцип обслуговування споживачів зводиться до витрати мінімальної кількості часу і зусиль з їхнього боку при купівлі товарів або послуг. Розкриття сутності цього принципу вимагає його інтерпретування в наступному напрямку, пов'язаному безпосередньо з торговельним підприємством, яке має пропонувати широкий асортимент і відповідну глибину асортименту з метою покупки в одному місці, здійснюваної за прийнятною ціною; створити необхідні умови для покупки, включаючи необхідність розташування у відносній близькості до місця проживання споживача або наявності хорошої і зручною транспортної доступності.Суттєве значення для споживача представляє пропонований асортимент, тобто якщо в торговому об'єкті не здійсниться покупка, то всі інші елементи споживчого обслуговування можуть залишитися неоціненим.Основна мета запропонованої розробки - розглянути і інтерпретувати сутність і основні особливості розвитку товарного асортименту підприємства і на цій базі детермінувати ключові рішення, які в своїй сукупності впливають на результати здійснюваної торговельної діяльност

Inventory replenishment in retail : the efficient full service strategy

In this paper we compare two inventory replenishment strategies for retailers and evaluate their effect on service levels, average inventory and the number of order lines. The first inventory replenishment strategy we consider is the Full Service strategy which is currently applied by many retailers and orders at a review period if either a case pack fits onto the shelves or the minimum reorder level is reached. This strategy is compared to an Efficient Full Service strategy where an order is placed only if at areview period the inventory position drops below the minimum reorder level; then as many case packs are ordered as possible taking into account the limited shelf space. This modified strategy will be compared with the current strategy. We will derive approximations for the key performance indicators and use simulation based on empirical data for thousands of SKU’s at multiple stores from a European retailer to quantify the improvement potential of the new strategy and to evaluate our approximations. The results show that, on average, inventory can be reduced with 22% and the number of handled order lines can be reduced with 17% when applying the Efficient Full Service strategy, while guaranteeing the same target customer service level. The approximations for the average inventory and the number of order lines perform very well at the store level and perform well at the SKU level. We also show that these approximations can be used as good indicators for the improvement potential of the new replenishment strategy

Static versus dynamic safety stocks in a retail environment with weekly sales patterns

Sales in European retail environments typically follow a weekly pattern having high sales at the end of the week and low sales at the start of the week. In this paper we compare two different ways of setting safety stock norms in a retail environment with weekly sales patterns. The first option is to set a single safety stock norm, which is constant throughout the week. The second option is a safety stock norm which is dynamic since it depends on the weekday. The inventory is controlled periodically and a lost sales environment is assumed. We study the impact of the dynamic safety stock on the inventory holding and shortage costs as well as on drivers of handling costs like the number of orderlines and the workload balance, since earlier research has shown that handling costs are relatively large for retailers. We use a full factorial experiment and simulation to evaluate both inventory replenishment strategies

A method for analyzing the delivery frequency from a distribution center to a retail grocery store

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2005.Includes bibliographical references (leaves 67-68).Currently, no adequate method exists for determining how frequently a retail store in a supermarket chain should receive deliveries from its distribution center. Existing methods neglect many crucial constraints, such as the necessity for deliveries to fall on fixed days of the week, severely limited shelf space, and the inability for many stores to hold additional overstock product in a backroom. This paper addresses the problem by outlining a new method for determining the delivery frequency by developing a simulation model for the replenishment process of a supermarket chain. The model can also be used to provide insight into other aspects of the replenishment process, such as shelf space allocation, and reorder rules. Using this model, we were able to show that significant cost savings were available to the supermarket chain we worked with on the project by changing the delivery schedules for their stores.by Christopher Wayne Kerslake.M.Eng.in Logistic

Managing a Retailer's Shelf Space, Inventory, and Transportation

Retailers must constantly strive for excellence in operations; extremely narrow profit margins leave little room for waste and inefficiency. This article reports a retailer's challenge to balance transportation, shelf space, and inventory costs. A retailer sells multiple products with stochastic demand. Trucks are dispatched from a warehouse and arrive at a store with a constant lead time. Each truck has a finite capacity and incurs a fixed shipping cost, no matter the number of units shipped. There is a per unit shelf-space cost as well as holding and backorder penalty costs. Three policies are considered for dispatching trucks: a minimum quantity continuous review policy, a full service periodic review policy, and a minimum quantity periodic review policy. The first policy ships a truck when demand since the previous shipment equals a fixed fraction of a truck's capacity, i.e., a minimum truck utilization. The exact analysis of that policy is the same as the analysis of reorder point policies for the multiechelon problem with one-warehouse, multiple retailers, and stochastic demand. That analysis is not computationally prohibitive, but the minimum quantity level can be chosen with a simple economic order quantity (EOQ) heuristic. An extensive numerical study finds the following: Either of the two periodic review policies may have substantially higher costs than the continuous review policy, in particular when the warehouse to store lead time is short; the EOQ heuristic performs quite well; the minimum quantity policy's total cost is relatively insensitive to the chosen transportation utilization, and its total cost is close to a lower bound developed for this problem.Inventory Management, Stochastic Demand, Joint Setup Cost

Joint Replenishment and Supply Chain Actions in the Retail Grocery Industry: Two Essays

This study investigated supply chain management practices in the retail grocery industry from two perspectives. First, the operational performance objectives were examined by developing and testing a periodic review, joint replenishment model and heuristic. Joint replenishment policies, designed to coordinate the ordering of multiple items, can reduce inventory costs by synchronizing transportation and replenishment decisions (Cetinkaya and Lee, 2000). A fully specified model was developed taking into account the cost disadvantage of over-declared shipments. Based on the performance of the Full model, a Truck heuristic was proposed to fill a truck with each order. By varying the model parameters, the study demonstrated the large impact transportation costs had on total inventory costs and the viability of the Truck heuristic, even for moderate differences in transportation rates. A simulation study tested violations of the demand normality assumption and found the Full model suboptimized the order interval and base stock levels under non-normal demand conditions. The result was a 2 percent cost increase over the expected costs in the Full model. The primary cost drivers were positive or negative deviations from truckload shipments and higher than expected demand during the order interval and replenishment period. The second essay examined the strategic objectives of the retail grocer using the Schumpeterian perspective to relate supply chain actions, market-based actions, and firm performance in a longitudinal study. A structured content method was used to code articles reporting on supply chain and market-based activities. The study found that higher levels of supply chain and market-based actions, a source of competitive advantage, resulted in higher sales growth. Unexpectedly, firms engaged in a broad range of supply chain activities realized a decline in sales, suggesting that a more narrow focus on specific supply chain programs provided greater financial benefits to firms in the retail grocery industry. An exploratory study using cluster analysis found grocery retailers used a variety of strategies. Larger firms were more likely to focus on market-based strategies and realized the largest sales growth. Smaller firms, on the other hand, tended to choose balanced or supply chain-focused strategies, while still realizing average sales growth

Managing out-of-stocks and over-stock occurrences in supermarket stores: a case study in Singapore

Despite over 40 years of research on out-of-stock (OOS) and over-stock (OS) occurrences, OOS rates remain at an average of 8%. Further, while the store has been found to be a major contributor to OOS situations, it continues to remain a ‘black-box’ in OOS research, especially at the operational level. This thesis examines how supermarket stores execute in-store processes to manage OOS and OS events before, during and after their occurrences. It adopted the case study approach to investigate four specific in-store operations practices – planning and ordering, receiving and checkout, storage, and shelf replenishment - of 19 stores of a major supermarket chain in Singapore. Using semi-structured interviews supplemented by unobtrusive on-site observations of live in-store processes, this study found that OOS and OS occurrences were generally attributable to mismanagement of logistical processes, especially failure to deal with trivial operational issues and minor human errors on-time. Store managers’ attitudes toward enforcement of standard operations procedures (SOPs) also played a significant role in minimizing OOS and OS occurrences in-store. Contrasting the manner in which low-OOS and high-OOS stores handled OOS and OS events, this study unearthed five specific approaches the case supermarket stores used, depending on the in-store retailing dynamics at the time and store management’s knowledge of the causes of their occurrence. From a theoretical perspective, findings from this study have provided a theoretical thread, linking the relationships between store management commitment toward OOS and OS events and OOS and OS performance. They also bring many of the well-documented OOS and OS measures from a broad strategic dimension to the detailed operational level. From a practical standpoint, these findings offer four major Despite over 40 years of research on out-of-stock (OOS) and over-stock (OS) occurrences, OOS rates remain at an average of 8%. Further, while the store has been found to be a major contributor to OOS situations, it continues to remain a ‘black-box’ in OOS research, especially at the operational level. This thesis examines how supermarket stores execute in-store processes to manage OOS and OS events before, during and after their occurrences. It adopted the case study approach to investigate four specific in-store operations practices – planning and ordering, receiving and checkout, storage, and shelf replenishment - of 19 stores of a major supermarket chain in Singapore. Using semi-structured interviews supplemented by unobtrusive on-site observations of live in-store processes, this study found that OOS and OS occurrences were generally attributable to mismanagement of logistical processes, especially failure to deal with trivial operational issues and minor human errors on-time. Store managers’ attitudes toward enforcement of standard operations procedures (SOPs) also played a significant role in minimizing OOS and OS occurrences in-store. Contrasting the manner in which low-OOS and high-OOS stores handled OOS and OS events, this study unearthed five specific approaches the case supermarket stores used, depending on the in-store retailing dynamics at the time and store management’s knowledge of the causes of their occurrence. From a theoretical perspective, findings from this study have provided a theoretical thread, linking the relationships between store management commitment toward OOS and OS events and OOS and OS performance. They also bring many of the well-documented OOS and OS measures from a broad strategic dimension to the detailed operational level. From a practical standpoint, these findings offer four major sets of best-practice guidelines on OOS and OS management that relates to the role of store managers, adherence to SOPs, supplier relationship management and effects of contextual factors

Modeling and Controlling of an Integrated Distribution Supply Chain: Simulation Based Shipment Consolidation Heuristics

Increasing competition due to market globalization, product diversity and technological breakthroughs stimulates independent firms to collaborate in a supply chain that allows them to gain mutual benefits. This requires collective knowledge of the coordination and integration mode, including the ability to synchronize interdependent processes, to integrate information systems and to cope with distributed learning. The Integrated Supply Chain Problem (ISCP) is concerned with coordinating the supply chain tires from supplier, production, inventory and distribution delivery operations to meet customer demand with an objective to minimize the cost and maximize the supply chain service levels. In order to achieve high performance, supply chain functions must operate in an integrated and coordinated manner. Several challenging problems associated with integrated supply chain design are: (1) how to model and coordinate the supply chain business processes; (2) how to analyze the performance of an integrated supply chain network; and (3) how to evaluate the dynamic of the supply chain to obtain a comprehensive understanding of decision-making issues related to supply network configurations. These problems are most representative in the supply chain theory’s research and applications. A particular real life supply chain considered in this study involves multi echelon and multi level distribution supply chains, each echelon with its own inventory capacities and multi product types and classes. Optimally solving such an integrated problem is in general not easy due to its combinatorial nature, especially in a real life situation where a multitude of aspects and functions should be taken into consideration. In this dissertation, the simulation based heuristics solution method was implemented to effectively solve this integrated problem. A complex real life simulation model for managing the flow of material, transportation, and information considering multi products multi echelon inventory levels and capacities in upstream and downstream supply chain locations supported by an efficient Distribution Requirements Planning model (DRP) was modeled and developed named (LDNST) involving several sequential optimization phases. In calibration phase (0), the allocation of facilities to customers in the supply chain utilizing Add / Drop heuristics were implemented, that results in minimizing total distance traveled and maximizing the covering percentage. Several essential distribution strategies such as order fulfillment policy and order picking principle were defined in this phase. The results obtained in this phase were considered in further optimization solutions. The transportation function was modelled on pair to pair shipments in which no vehicle routing decision was considered, such an assumption generates two types of transportation trips, the first being Full Truck Load trips (FTL) and the second type being Less Truck Load trips (LTL). Three integrated shipment consolidation heuristics were developed and integrated into the developed simulation model to handle the potential inefficiency of low utilization and high transportation cost incurred by the LTL. The first consolidation heuristic considers a pure pull replenishment algorithm, the second is based on product clustering replenishments with a vendor managed inventory concept, and the last heuristic integrates the vendor managed inventory with advanced demand information to generate a new hybrid replenishment strategy. The main advantage of the latter strategy, over other approaches, is its ability to simultaneously optimize a lot of integrated and interrelated decisions for example, on the inventory and transportation operations without considering additional safety stock to improve the supply chain service levels. Eight product inventory allocation and distribution strategies considering different safety stock levels were designed and established to be considered as main benchmark experiments examined against the above developed replenishment strategies; appropriate selected supply chain performance measures were collected from the simulation results to distinguish any trading off between the proposed distribution strategies. Three supply chain network configurations were proposed: the first was a multi-echelon distribution system with an installation stock reorder policy; the second proposed configuration was Transshipment Point (TP) with a modified (s,S) inventory; and the last considered configuration was a Sub-TP, a special case from the second configuration. The results show that, depending on the structure of multi-echelon distribution systems and the service levels targets, both the echelon location with installation stock policy and advanced demand information replenishment strategy may be advantageous, and the impressive results and service level improvements bear this out. Considering the complexity of modeling the real life supply chain, the results obtained in this thesis reveal that there are significant differences in performance measures, such as activity based costs and network service levels. A supply chain network example is employed to substantiate the effectiveness of the proposed methodologies and algorithms

Managing computational complexity through using partitioning, approximation and coordination

Problem: Complex systems are composed of many interdependent subsystems with a level of complexity that exceeds the ability of a single designer. One way to address this problem is to partition the complex design problem into smaller, more manageable design tasks that can be handled by multiple design teams. Partitioning-based design methods are decision support tools that provide mathematical foundations, and computational methods to create such design processes. Managing the interdependency among these subsystems is crucial and a successful design process should meet the requirements of the whole system which needs coordinating the solutions for all the partitions after all. Approach: Partitioning and coordination should be performed to break down the system into subproblems, solve them and put these solutions together to come up with the ultimate system design. These two tasks of partitioning-coordinating are computationally demanding. Most of the proposed approaches are either computationally very expensive or applicable to only a narrow class of problems. These approaches also use exact methods and eliminate the uncertainty. To manage the computational complexity and uncertainty, we approximate each subproblem after partitioning the whole system. In engineering design, one way to approximate the reality is using surrogate models (SM) to replace the functions which are computationally expensive to solve. This task also is added to the proposed computational framework. Also, to automate the whole process, creating a knowledge-based reusable template for each of these three steps is required. Therefore, in this dissertation, we first partition/decompose the complex system, then, we approximate the subproblem of each partition. Afterwards, we apply coordination methods to guide the solutions of the partitions toward the ultimate integrated system design. Validation: The partitioning-approximation-coordination design approach is validated using the validation square approach that consists of theoretical and empirical validation. Empirical validation of the design architecture is carried out using two industry-driven problems namely the a hot rod rolling problem’, ‘a dam network design problem’, ‘a crime prediction problem’ and ‘a green supply chain design problem’. Specific sub-problems are formulated within these problem domains to address various research questions identified in this dissertation. Contributions: The contributions from the dissertation are categorized into new knowledge in five research domains: • Creating an approach to building an ensemble of surrogate models when the data is limited – when the data is limited, replacing computationally expensive simulations with accurate, low-dimensional, and rapid surrogates is very important but non-trivial. Therefore, a cross-validation-based ensemble modeling approach is proposed. • Using temporal and spatial analysis to manage the uncertainties - when the data is time-based (for example, in meteorological data analysis) and when we are dealing with geographical data (for example, in geographical information systems data analysis), instead of feature-based data analysis time series analysis and spatial statistics are required, respectively. Therefore, when the simulations are for time and space-based data, surrogate models need to be time and space-based. In surrogate modeling, there is a gap in time and space-based models which we address in this dissertation. We created, applied and evaluated the effectiveness of these models for a dam network planning and a crime prediction problem. • Removing assumptions regarding the demand distributions in green supply chain networks – in the existent literature for supply chain network design, there are always assumptions about the distribution of the demand. We remove this assumption in the partition-approximate-compose of the green supply chain design problem. • Creating new knowledge by proposing a coordination approach for a partitioned and approximated network design. A green supply chain under online (pull economy) and in-person (push economy) shopping channels is designed to demonstrate the utility of the proposed approach