Identification and analysis of some problems of automated inventory replenishment in a department store chain

An automated replenishment system for basic stock items had been in place for some years in this chain of over 70 stores. However, the system was plagued by inconsistent replenishment performance, resulting in both out-of-stocks and overstocks at the product/store level. In this paper the authors report a number of factors which were identified as contributing to this inconsistent performance. They have also highlighted the need to understand the nature of demand patterns in inventory replenishment decision making. The authors identify some special problems in relation to the retail store environment, and suggest approaches which may enhance replenishment performance.