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Consideration for Chance Losses with Inventory Optimizations


Masakazu Takahashi


Vol. 7  No. 8  pp. 52-58


Even for the retail business, the optimization for the inventory is one of the key activities, because they trade the items that have a limit-time to eat. Depending on the demand, there are two losses in the food inventories; the abandoned loss and the chance loss. Both the losses are the same in the point to miss the sales, but concerning to the technique of the stock control among the grocery with the best-before date, the notion for the chance loss had not been examined enough. This thesis proposes the inventory optimization methods for the grocery in which have the best-before date. From the examination with the model in this thesis, it is effective to improve EOQ for the original item that intends to purchase to promote to purchase something, in case of the appearance for the chance loss. At the same time, it is also effective to reduce the safety stock with this measurement.


Inventory control, Optimization, Chance loss, Newsboy problem, EOQ