A new approach for ordering decision under uncertainties: a case study in the retail supply chain

Mohamed Bahroun, Slim Harbi and Hanen Bouchriha

International Journal of Logistics Systems and Management, 2019, vol. 32, issue 3/4, 392-413

Abstract: Many retailers experience significant losses due to out of stock (OOS) risk. A thorough analysis of a case study has revealed that this situation depends on three main factors: first, the demand and supply risks, second the responses of customers to on shelves OOS and third the behaviour of managers facing these risks. This exploratory and theoretical research focuses on the modern retail supply chain risks associated with the supply side and the demand side and highlights the impact of these risks on the on shelves OOS and the total cost of lost sales (TCLS). We propose a new approach for ordering decision under supply and demand uncertainties. This approach considers a new method to predict the supply risk and proposes a realistic estimation of the TCLS taking into account the responses of customers to OOS. Some numerical examples from a real case study are presented to illustrate the proposed approach.

Keywords: modern retail supply chain; supply risk; demand risk; lost sales; out-of-stock; consumer behaviour. (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijlsma:v:32:y:2019:i:3/4:p:392-413

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