A generic framework for decision support in retail inventory management

TL;DR

This paper proposes a comprehensive decision support framework for retail inventory management that integrates key components like demand forecasting and replenishment to handle increasing product complexity.

Contribution

It introduces a holistic, generic framework that combines multiple inventory management operations into a unified decision support system.

Findings

Framework supports multiple inventory operations

Enhances decision-making for large product ranges

Aims to balance conflicting inventory objectives

Abstract

The success of any business depends on how well it is able to satisfy customer demand, while remaining financially viable. Globalisation and the growth of e-commerce have resulted in retail businesses having to manage increasing numbers of products. As the number of products sold increases, so does the complexity of the corresponding inventory management problem. High-quality decision making, in this regard, necessitates the utilisation of computerised decision support systems capable of accommodating the complexity presented by a large number of products. Existing frameworks for decision support in inventory management are mainly focused on a single facet of the inventory management problem - generic, integrated frameworks seem to be absent from the literature. In this paper, a holistic framework design is proposed which integrates all of the major components expected to form part of a generic framework for inventory management. The objective of the framework is to provide decision support in respect of various inventory management operations, such as product segmentation, demand forecasting and determining the sizes and timings of replenishment orders, in pursuit of a desirable balance between the conflicting objectives in inventory management.