A bayesian approach to the two-period style-goods inventory problem with single replenishment and heterogeneous poisson demands

John W. Bradford, Paul Sugrue

Research output: Contribution to journalArticle

52 Citations (Scopus)

Abstract

This paper presents a model of the two-period style-goods inventory problem for a firm which stocks many hundreds of distinctive items having heterogeneous Poisson demands. The model uses a Bayesian procedure for forecast and probability revisions based on an aggregation-by-items scheme. These revised forecasts are then incorporated into a model which is used to derive the optimal inventory-stocking policies which maximize expected profit during the season. The model is illustrated using an actual case study of inventory planning for unframed poster art.

Original languageEnglish (US)
Pages (from-to)211-218
Number of pages8
JournalJournal of the Operational Research Society
Volume41
Issue number3
DOIs
StatePublished - Jan 1 1990

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Profitability
Agglomeration
Planning
Replenishment
Bayesian approach
Art
Profit

Keywords

  • Forecasting
  • Inventory
  • Statistics

ASJC Scopus subject areas

  • Management Information Systems
  • Strategy and Management
  • Management Science and Operations Research
  • Marketing

Cite this

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