Optimal Shelf-Inspection Policies of Self-Service Retailers

Abstract

In Japan, the annual sales share of supermarkets and convenience stores increased around 2000. Both self-servicing and delivering a wide variety of products are denominators of these stores, and they have an advantage in retail business competitions because self-service stores can reduce labor costs by engaging consumers with the provision of services and the productivity of these stores is higher than specialty stores. In case of self-service stores, miscellaneous jobs such as cash registering, goods arranging, and shelf reviewing, have to be performed by limited number of clerks and efficient operation methods are required. The inventory management of store shelves for avoiding out-of-stock is an important issue and the AHM-Model which is a famous periodic monitoring inventory utilizing dynamic programming was proposed. In this paper, store shelves are monitored periodically and are replenished when the total amount of goods is below a threshold. Total expected cost rates are defined and optimal thresholds are discussed utilizing the cumulative damage model analytically.