Article ID: | iaor1989426 |
Country: | United Kingdom |
Volume: | 40 |
Issue: | 8 |
Start Page Number: | 719 |
End Page Number: | 727 |
Publication Date: | Aug 1989 |
Journal: | Journal of the Operational Research Society |
Authors: | Silver Edward A., Kelle Peter |
In this paper the authors consider an item that is sold in a number of different prescribed sizes, an example being an item of clothing. They first deal with the situation where the total demand for a forthcoming period is known accurately but only historical or subjective estimates of the fractions of demand in each size are available. A procedure is developed for optimally allocating a given stock budget among the different sizes. Its performance is compared with a simpler, proportional allocation scheme. The numerical examples include data on clothing provided by a major municipal organization. The case where the total demand is a random variable is also treated.