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Estimating a retailer's base stock level: an optimal distribution center order forecast policy

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Journal of the Operational Research Society

Abstract

Errors in order forecasts are a salient source of inefficiencies in retail supply chains. Many operational decisions made by suppliers hinge on order forecasts, which typically are based solely on either order or point-of-sale (POS) history. Using a discrete-time formulation, this research demonstrates that if a supplier knows that a retailer is using a base stock policy, it should use that knowledge to forecast the retailer's orders, even if the supplier does not know the base stock level and/or have access to POS data.

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Authors and Affiliations

  1. Auburn University, AL, USA

    B D Williams

  2. University of Arkansas, Fayetteville, AR, USA

    M A Waller

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  1. B D Williams
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  2. M A Waller
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Williams, B., Waller, M. Estimating a retailer's base stock level: an optimal distribution center order forecast policy. J Oper Res Soc 62, 662–666 (2011). https://doi.org/10.1057/jors.2010.55

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  • DOI: https://doi.org/10.1057/jors.2010.55

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