A Theoretical Model for Testing New Product Sales Velocity at Small Format Retail Stores

Hiroaki Sandoh; Roy Larke

RAIRO - Operations Research (2010)

  • Volume: 36, Issue: 2, page 157-172
  • ISSN: 0399-0559

Abstract

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The present study proposes a theoretical model to test sales velocity for new products introduced in small format retail stores. The model is designed to distinguish fast moving products within a relatively short period. Under the proposed model, the sales of a newly introduced product are monitored for a prespecified period T, e.g., one week, and if the number of items sold over T is equal to a prespecified integer k or more, the product is considered a fast moving product and is carried over to the following sales periods. A slow moving product could be quickly replaced with alternative merchandise in order to make best use of shelf space. The paper first presents definitions of fast and slow moving products, and then a proposed sales test policy based on the model is formulated, where the expected loss is to be minimized with respect to the integer k. Numerical examples based on actual data collected from a convenience store in Japan are also presented to illustrate the theoretical underpinnings of the proposed sales test model.

How to cite

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Sandoh, Hiroaki, and Larke, Roy. "A Theoretical Model for Testing New Product Sales Velocity at Small Format Retail Stores." RAIRO - Operations Research 36.2 (2010): 157-172. <http://eudml.org/doc/105267>.

@article{Sandoh2010,
abstract = { The present study proposes a theoretical model to test sales velocity for new products introduced in small format retail stores. The model is designed to distinguish fast moving products within a relatively short period. Under the proposed model, the sales of a newly introduced product are monitored for a prespecified period T, e.g., one week, and if the number of items sold over T is equal to a prespecified integer k or more, the product is considered a fast moving product and is carried over to the following sales periods. A slow moving product could be quickly replaced with alternative merchandise in order to make best use of shelf space. The paper first presents definitions of fast and slow moving products, and then a proposed sales test policy based on the model is formulated, where the expected loss is to be minimized with respect to the integer k. Numerical examples based on actual data collected from a convenience store in Japan are also presented to illustrate the theoretical underpinnings of the proposed sales test model. },
author = {Sandoh, Hiroaki, Larke, Roy},
journal = {RAIRO - Operations Research},
keywords = {Sales test; fast moving product; slow moving product; expected loss.; sales test; moving product; expected loss},
language = {eng},
month = {3},
number = {2},
pages = {157-172},
publisher = {EDP Sciences},
title = {A Theoretical Model for Testing New Product Sales Velocity at Small Format Retail Stores},
url = {http://eudml.org/doc/105267},
volume = {36},
year = {2010},
}

TY - JOUR
AU - Sandoh, Hiroaki
AU - Larke, Roy
TI - A Theoretical Model for Testing New Product Sales Velocity at Small Format Retail Stores
JO - RAIRO - Operations Research
DA - 2010/3//
PB - EDP Sciences
VL - 36
IS - 2
SP - 157
EP - 172
AB - The present study proposes a theoretical model to test sales velocity for new products introduced in small format retail stores. The model is designed to distinguish fast moving products within a relatively short period. Under the proposed model, the sales of a newly introduced product are monitored for a prespecified period T, e.g., one week, and if the number of items sold over T is equal to a prespecified integer k or more, the product is considered a fast moving product and is carried over to the following sales periods. A slow moving product could be quickly replaced with alternative merchandise in order to make best use of shelf space. The paper first presents definitions of fast and slow moving products, and then a proposed sales test policy based on the model is formulated, where the expected loss is to be minimized with respect to the integer k. Numerical examples based on actual data collected from a convenience store in Japan are also presented to illustrate the theoretical underpinnings of the proposed sales test model.
LA - eng
KW - Sales test; fast moving product; slow moving product; expected loss.; sales test; moving product; expected loss
UR - http://eudml.org/doc/105267
ER -

References

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