Abstract
This paper presents a model of the two-period style-goods inventory problem for a firm which stocks many hundreds of distinctive items having heterogeneous Poisson demands. The model uses a Bayesian procedure for forecast and probability revisions based on an aggregation-by-items scheme. These revised forecasts are then incorporated into a model which is used to derive the optimal inventory-stocking policies which maximize expected profit during the season. The model is illustrated using an actual case study of inventory planning for unframed poster art.
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Bradford, J., Sugrue, P. A Bayesian Approach to the Two-period Style-goods Inventory Problem with Single Replenishment and Heterogeneous Poisson Demands. J Oper Res Soc 41, 211–218 (1990). https://doi.org/10.1057/jors.1990.37
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DOI: https://doi.org/10.1057/jors.1990.37