Improving Sales through Inventory Reduction: A Retail Chain Case Study
Today's challenging business environment, with unpredictable demand and volatility, requires a supply chain strategy that handles uncertainty and risks in the right way. Even though inventory models have been previously explored, this paper seeks to apply these concepts on a practical situation. This study involves the inventory replenishment problem, applying techniques that are mainly based on mathematical assumptions and modeling. The primary goal is to improve the retailer’s supply chain processes taking store differences when setting the various target stock levels. Through inventory review policy, picking piece implementation and minimum exposure definition, we were able not only to promote the inventory reduction as well as improve sales results. The inventory management theory from literature review was then tested on a single case study regarding a particular department in one of the largest Latam retail chains.
Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1132459Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 1388
 Ehrenthal, J. C. F.; Honhon, Dorothée; Van Woensel, Tom. Demand seasonality in retail inventory management. European Journal of Operational Research, v. 238, n. 2, p. 527-539, 2014.
 Ishfaq, R., Defee, C. C., Gibson, B. J., & Raja, U.; Realignment of the physical distribution process in omni-channel fulfillment. International Journal of Physical Distribution & Logistics Management, 2016, 46.6/7: 543-561.
 Agrawal, Narendra; Smith, Stephen A. Optimal inventory management for a retail chain with diverse store demands. European Journal of Operational Research, v. 225, n. 3, p. 393-403, 2013.
 Aastrup, Jesper; Kotzab, Herbert. Forty years of out-of-stock research–and shelves are still empty. The International Review of Retail, Distribution and Consumer Research, v. 20, n. 1, p. 147-164, 2010.
 Zomerdijk, Leonieke G.; De Vries, Jan. An organizational perspective on inventory control: Theory and a case study. International Journal of Production Economics, v. 81, p. 173-183, 2003.
 Wilson, Jonathan. Essentials of business research: A guide to doing your research project. Sage, 2014.
 Gulati, P. M. Research Management: Fundamental & Applied Research. Busca Inc, 2009.
 Babbie, Earl R. The practice of social research. Nelson Education, 2015.
 Pelissier, R., “Business Research Made Easy” Juta & Co., 2008.
 Eisenhardt, Kathleen M. Building theories from case study research. Academy of management review, 1989, 14.4: 532-550.
 Mariotto, Fabio Luiz; Zanni, Pedro Pinto; Moraes, Gustavo Hermínio Salati. What is the use of a single-case study in management research?. Revista de Administração de Empresas, 2014, 54.4: 358-369.
 Yin, Robert K. Case study research: Design and Methods. SAGE publications. Thousand oaks, 2009.
 Denzin, Norman K.; Lincoln, Y. Qualitative research. Thousand Oaks ua, 2000, 413-427.
 Hwang, Hark; Choi, Bum; Lee, Min-Jin. A model for shelf space allocation and inventory control considering location and inventory level effects on demand. International Journal of Production Economics, 2005, 97.2: 185-195.
 Chen, Mu-Chen; Lin, Chia-Ping. A data mining approach to product assortment and shelf space allocation. Expert Systems with Applications, 2007, 32.4: 976-986.
 Mattos, M. G.; Magalhães, D. J. A. de M.. Brazilian Supply Chain Risk Analysis. 2010.
 Baumann, Fred. The shelf-connected supply chain: strategically linking CPFR with S&OP at the executive level. The Journal of Business Forecasting, v. 29, n. 4, p. 21, 2010.
 Chopra, Sunil; Sodhi, Manmohan S. Managing risk to avoid supply-chain breakdown. MIT Sloan management review, 2004, 46.1: 53.
 Bijvank, Marco, and Iris FA Vis. "Lost-sales inventory theory: A review." European Journal of Operational Research 215.1 (2011): 1-13.
 Chopra, Sunil; Meindl, Peter. Supply chain management. Strategy, planning & operation. Das summa summarum des management, 2007, 265-275.
 Yang, Ming-Hsien; Chen, Wen-Cher. A study on shelf space allocation and management. International journal of production economics, 1999, 60: 309-317.