Strategy Selection Study of Out-of-stock Substitution and Probabilistic Selling

DOI

10.2991/edmi-19.2019.42How to use a DOI?

Keywords

Demand Uncertainty; Out-of-stock Substitution; Probabilistic Selling; Strategic Choice.

Abstract

With the development of the economy and the improvement of productivity, many products have entered the buyer's market from the seller's market. To maximize the appeal of consumers with diverse needs, retailers offer a range of similar and alternative products for consumers to choose from. For retailers, the increase in product categories has expanded the market size and increased sales revenue, but it has also increased the difficulty of retailer purchasing decisions and inventory management. The uncertain demand for multiple products and the substitution of products to meet demand make it even more difficult for retailers to match inventory and demand and improve inventory efficiency. In this case, retailers can consider two strategies to manage the demand uncertainty of this multi-product, namely out-of-stock replacement and probabilistic sales. In view of the fact that out-of-stock substitution and probabilistic sales strategies can manage the uncertainty of multi-product demand through demand substitution, this paper will build an extended newsboy model under two strategies, and compare and select these two strategies.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Huimin Liu
PY  - 2019/08
DA  - 2019/08
TI  - Strategy Selection Study of Out-of-stock Substitution and Probabilistic Selling
BT  - Proceedings of the 1st International Symposium on Economic Development and Management Innovation (EDMI 2019)
PB  - Atlantis Press
SP  - 261
EP  - 265
SN  - 2352-5428
UR  - https://doi.org/10.2991/edmi-19.2019.42
DO  - 10.2991/edmi-19.2019.42
ID  - Liu2019/08
ER  -