Inventory model with seasonal demand: a specific application to haute couture

B. Joon Park, Yih Long Chang, Johnny C. Ho
2011 The International Journal of Integrated Supply Management  
In the stochastic multiperiod inventory problem, a vast majority of the literature deals with demand volume uncertainty. Other dimensions of uncertainty have generally been overlooked. In this paper, we develop a newsboy formulation for the aggregate multiperiod inventory problem intended for products of short sales season and without replenishments. A distinguishing characteristic of our formulation is that it takes a time dimension of demand uncertainty into account. The proposed model is
more » ... oposed model is particularly suitable for applications in haute couture, i.e., high fashion industry. The model determines the time of switching primary sales effort from one season to the next as well as optimal order quantity for each season with the objective of maximizing expected profit over the planning horizon. We also derive the optimality conditions for the time of switching primary sales effort and order quantity. Furthermore, we show that if time uncertainty and volume uncertainty are independent, order quantity becomes the main decision over the interval of the primary selling season. Finally, we demonstrate that the results from the two-season case can be directly extended to the multiseason case and the limited resource multiple-item case.
doi:10.1504/ijism.2011.044886 fatcat:c52juigw7fhqrpqvbwaksvxh2q