An optimal order quantity for special display goods in retailing: The effect of a mirror and false bottom

This paper proposes an optimal order quantity model for special display goods at a retail store, where special display goods refer to merchandise which are heaped up in end displays or in special areas at a retail store. It is empirically known that the special display goods tend to sell well if their quantity displayed is large, but do not when it becomes small. In this study, we develop a model which takes account of the effect of a mirror and false bottom, and discuss an optimal inventory level to order, along with order quantity and an optimal size of the false bottom. Numerical examples are also presented to illustrate the proposed model.