Abstract
It is very important for supermarkets and convenience stores to detect fast and slow moving brands from a huge variety of merchandise as soon as possible. The present study proposes a new brand monitoring strategy for retailing where the sale of a new brand is monitored for a specific term T (> 0) and then a judgment is made in reference to whether the brand is a fast moving brand or not. More precisely, if the number of products sold on (0, T) is greater than or equal to an integer k, the brand is regarded as a fast moving brand to continue its usual sale after the monitoring period. Otherwise it is regarded as a slow moving brand and its bargain sale is started to make space for another new brand or other standard brands. This study formulates the total loss incurred by the misjudgments under the above strategy, that is, a misjudgment of regarding a fast moving brand as a slow one and a misjudgment of regarding a slow moving brand as a fast one. The existence of an optimal strategy minimizing the total loss is then shown. Numerical examples are also presented to illustrate the proposed strategy.
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