Optimizing Inventory Replenishment of Retail Fashion Products

@article{Fisher2001OptimizingIR,
  title={Optimizing Inventory Replenishment of Retail Fashion Products},
  author={Marshall L. Fisher and Kumar Rajaram and Ananth Raman},
  journal={Manuf. Serv. Oper. Manag.},
  year={2001},
  volume={3},
  pages={230-241}
}
We consider the problem of determining (for a short lifecycle) retail product initial and replenishment order quantities that minimize the cost of lost sales, back orders, and obsolete inventory. We model this problem as a two-stage stochastic dynamic program, propose a heuristic, establish conditions under which the heuristic finds an optimal solution, and report results of the application of our procedure at a catalog retailer. Our procedure improves on the existing method by enough to double… 

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