ALLOCATING REGIONAL INVENTORY TO REDUCE OUT-OF-STOCK COSTS
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Abstract
Methods and systems for allocating regional inventory to reduce out-of-stock costs are described. A method may include identifying a total number of units of an item to be stored in a plurality of regions and determining an order forecast for the item in each of the plurality of regions. The method may also include receiving a unit out-of-stock cost of the item in each of the plurality of regions and calculating an expected cost for each of the plurality of regions based, at least in part, on the total number of units of the item, each region'"'"'s respective order forecast, and each region'"'"'s respective unit out-of-stock cost. The method may further include allocating a portion of the total number of units of the item to each of the plurality of regions to reduce a sum of the expected costs.
69 Citations
36 Claims
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1. -16. (canceled)
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17. A system, comprising:
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at least one processor; and a memory coupled to the at least one processor, wherein the memory stores program instructions, and wherein the program instructions are executable by the at least one processor to perform operations including; receiving a regional demand forecast for an item for each of a plurality of regions; receiving a unit out-of-stock cost of the item in each of the plurality of regions; calculating an expected out-of-stock cost for each of the plurality of regions based, at least in part, on each region'"'"'s respective regional demand forecast, target inventory of the item, and unit out-of-stock cost, wherein the calculating comprises calculating respective target inventories of the item for each of the plurality of regions, such that a difference between the expected out-of-stock costs for each of the plurality of regions is reduced; and allocating each calculated respective target inventory of the item to the respective region of the plurality of regions. - View Dependent Claims (18, 19, 20, 21, 22)
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23. An article of manufacture comprising a computer-readable storage medium having instructions stored thereon that, upon execution by a computer system, cause the computer system to perform operations comprising:
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receiving a regional demand forecast for an item for each of a plurality of regions; receiving a unit out-of-stock cost of the item in each of the plurality of regions; calculating an expected out-of-stock cost for each of the plurality of regions based, at least in part, on each region'"'"'s respective regional demand forecast, target inventory of the item, and unit out-of-stock cost, wherein the calculating comprises calculating respective target inventories of the item for each of the plurality of regions, such that a difference between the expected out-of-stock costs for each of the plurality of regions is reduced; and allocating each calculated respective target inventory of the item to the respective region of the plurality of regions. - View Dependent Claims (24, 25, 26, 27, 28, 29)
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30. A method, comprising:
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performing, by one or more computing devices, receiving a regional demand forecast for an item for each of a plurality of regions; receiving a unit out-of-stock cost of the item in each of the plurality of regions; calculating an expected out-of-stock cost for each of the plurality of regions based, at least in part, on each region'"'"'s respective regional demand forecast, target inventory of the item, and unit out-of-stock cost, wherein the calculating comprises calculating respective target inventories of the item for each of the plurality of regions, such that a difference between the expected out-of-stock costs for each of the plurality of regions is reduced; and allocating each calculated respective target inventory of the item to the respective region of the plurality of regions. - View Dependent Claims (31, 32, 33, 34, 35, 36)
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Specification