Enhancing competitiveness by innovative inventory pooling system for multi-retailers

Abstract

The main objective of this research was to optimise responses to random demands from multiple locations during appropriate periods and it also attempted to ensure opportunity cost of lost sales was minimised. The simulation model represented the inventory levels of sports retailers. Employing Monte Carlo simulation (MCS) integrated Microsoft® Excel, the paper establishes two simulation models of the whole process from product demand to supply in traditional mode (no pooling stores) and pooling mode (IIPS), respectively. The simulation system aimed to maximise system service fee after users joined the pooling system and limit the percentage of opportunity cost of lost sales to not more than the percentage of opportunity cost of lost sales for individual stores. By quantitative comparison and analysis, it is proved that inventory pooling could be effective method to improve performance of sport retailers in Thailand, especially in decreasing the percentage of opportunity cost of lost sales.