Making Management Decisions Caused by a Stock-Out

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MAGAZINE  №1 (90) February 2019

AUTHORS LUKINSKIY V.V.MAYEVSKIY A.G.

CATEGORY  Optimization and mathematical modelling Inventory management

ABSTRACT

Stock-out – an inventory shortage, is a situation which periodically or constantly retailers, networks of retail trade (and other commercial organizations connected with replenishment and stocks expenditure) face worldwide. Numerous publications of foreign authors proposing practical solutions for such organizations is a vivid example of it. Some retail chain stores and enterprises even issue guidebooks to handle stock-out.
In domestic literature, there are publications describing various stock-out forms, as well as recommendations associated with the decision-making on them. Nevertheless, the experience connected with the prevention and struggle against the stock-out consequences is uncoordinated, lacks common structure, and sequence of actions. An enterprise facing stock-out receives only fragmentary data on the nature of this phenomenon, necessary instruments of influence and the sequence of actions.
To give an idea of the existing spectrum of analytical approaches and possible practical solutions, is one of the main objectives of this article. At the same time, issues related directly to determining the stock volume and other parameters of a company's inventory management system are considered. Based on the analysis of the issues described above, a possible algorithm of actions an organization can follow in the event of a stock-out, is presented. The possible development of an approach to manage the most complex stock-out case – «with a lost demand» is also considered.

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