Resumen de Setting the Order-Up-to Level in a Retailer: challenges and Empirical Comparison of Simple Methods
Vicent Asensio Molina, Ángel Ruiz, José P. García-Sabater, Julio J. García Sabater
Order-up-to level is one of themost popular inventory management strategies in the retail industry. However, there exist several manners to fix the up-to-level. In this paper, we consider several of these manners and analyze their application to a real retail company. The company requires a method which is simple to understand and adopt and that should seek to minimize stockouts and in-store stock levels. We empirically compare, using real data, severalmethods to set the order-up-to value and report the performance of the system for each of them. Our results also demonstrate the relevance of two important factors, which are the size of the packaging and the seasonality of demand.
