Centralizing slow-moving items in a retail network:a case study

Goh, Shao Hung and Lim, Boon Lian (2014) Centralizing slow-moving items in a retail network:a case study. In: Proceedings of the 4th International Conference on Industrial Engineering and Operations Management (IEOM) - Bali, Indonesia January 7-9 2014. IEOM, IDN, pp. 899-908. ISBN 9780985549718

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Abstract

The subject of the study is a Singapore-based third-party logistics provider (3PL) that manages a network of retail stores on behalf of a public sector client. The network currently stocks a large number of slow-moving items (SMI) at store-level, which leads to significant working capital tied-down on inventory. This paper studies into and quantifies the effectiveness of a proposed approach to centralize the retail network’s inventory of slow-moving items to a pooling point. Results from the analysis show that under the base scenario with just 5% of items (by unit sales volume) stocked centrally, the aggregation of demand across retail outlets can contribute to a net 27.3% reduction in fulfillment costs. Furthermore, a selective centralization strategy can also be designed to be quite robust (i.e. costs would be close to optimum) within a broad range of SMI definitions.

Item Type:
Contribution in Book/Report/Proceedings
Subjects:
ID Code:
74687
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Deposited On:
21 Jul 2015 10:52
Refereed?:
Yes
Published?:
Published
Last Modified:
01 Jul 2020 07:35