Markdown Optimization at Multiple Stores
We study a markdown optimization problem commonly faced by many large retailers that involves joint decisions of inventory allocation and markdown pricing of a single product at multiple stores subject to various business rules. At the beginning of the markdown planning horizon, there is a certain amount of inventory of a product at a warehouse that needs to be allocated to many retail stores served by the warehouse over the planning horizon. In the same time, a markdown pricing scheme needs to be determined for each store over the planning horizon. A number of business rules for inventory allocation and markdown prices at the stores must be satisfied. The retailer does not have a complete knowledge about the probability distribution of the demand at a given store in a given time period. The retailers knowledge about the demand distributions improves over time as new information becomes available over time. Hence, the retailer employs a rolling horizon approach where the problem is re-solved at the beginning of each period by incorporating the latest demand information. We show that the problem involved at the beginning of each period is NP-hard even if the demand functions are deterministic and there is only a single store or a single time period. We thus focus on heuristic solution approaches.
Zhi-Long Chen Ming Chen
Robert H. Smith School of Business, University of Maryland, College Park, MD 20742, USA
国际会议
The Tenth International Conference on Information and Management Sciences(IMS)(第十届信息与管理科学国际会议)
拉萨
英文
159
2011-08-06（万方平台首次上网日期，不代表论文的发表时间）