The top-dog index: a new measurement for the demand consistency of the size distribution in pre-pack orders for a fashion discounter with many small branches

DOI10.1007/S10479-014-1746-8zbMATH Open1318.90008arXiv0804.1412OpenAlexW2089215237MaRDI QIDQ492833FDOQ492833

Authors: Sascha Kurz, Jörg Rambau, Jörg Schlüchtermann, Rainer Wolf 

Publication date: 21 August 2015

Published in: Annals of Operations Research (Search for Journal in Brave)

Abstract: We propose the new Top-Dog-Index, a measure for the branch-dependent historic deviation of the supply data of apparel sizes from the sales data of a fashion discounter. A common approach is to estimate demand for sizes directly from the sales data. This approach may yield information for the demand for sizes if aggregated over all branches and products. However, as we will show in a real-world business case, this direct approach is in general not capable to provide information about each branch's individual demand for sizes: the supply per branch is so small that either the number of sales is statistically too small for a good estimate (early measurement) or there will be too much unsatisfied demand neglected in the sales data (late measurement). Moreover, in our real-world data we could not verify any of the demand distribution assumptions suggested in the literature. Our approach cannot estimate the demand for sizes directly. It can, however, individually measure for each branch the scarcest and the amplest sizes, aggregated over all products. This measurement can iteratively be used to adapt the size distributions in the pre-pack orders for the future. A real-world blind study shows the potential of this distribution free heuristic optimization approach: The gross yield measured in percent of gross value was almost one percentage point higher in the test-group branches than in the control-group branches.

Full work available at URL: https://arxiv.org/abs/0804.1412

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zbMATH Keywords

revenue managementdemand forecastingfield studyparallel blind testingsize optimizationtop-dog-index

Mathematics Subject Classification ID

Case-oriented studies in operations research (90B90) Inventory, storage, reservoirs (90B05)

Cites Work

• Dynamic pricing in the presence of inventory considerations: research overview, current practices, and future directions
• Stocking Retail Assortments Under Dynamic Consumer Substitution
• Demand Estimation and Assortment Optimization Under Substitution: Methodology and Application
• On the Relationship Between Inventory Costs and Variety Benefits in Retail Assortments
• Inventory management of a fast-fashion retail network
• Coordinating clearance markdown sales of seasonal products in retail chains
• Revenue management and demand fulfillment: Matching applications, models, and software
• On simple representations of stopping times and stopping time sigma-algebras
• The integrated size and price optimization problem

Cited In (2)

• Evaluation of a new supply strategy for a fashion discounter
• An exact column-generation approach for the lot-type design problem

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