Random Demand and Multistore Shopping Behaviour. A Cost Minimising Model Based on a Two Bin Inventory Management System

R.W. Bacon

Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: The paper illustrates how, if individual households face random daily demand for the goods they use, a two bin inventory strategy, for determining the frequency of shopping and the amounts purchased, will lead to multi-store shopping and realistic distributions of inter shopping times. This approach shows that it is possible to generate overlapping market areas of competing stores without relying on inter-household heterogeneity.

Keywords: INVENTORIES; DEMAND; CONSUMERS (search for similar items in EconPapers)
JEL-codes: D11 C51 (search for similar items in EconPapers)
Date: 1998

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Persistent link: http://EconPapers.repec.org/RePEc:oxf:wpaper:99198

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