18.5.2 - Case Study 2: Retail Inventory Optimization
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Practice Questions
Test your understanding with targeted questions
What is demand forecasting?
💡 Hint: Think about how businesses predict what customers will want to buy.
Define overstock.
💡 Hint: What happens when items are not sold quickly enough?
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the primary goal of demand forecasting in retail?
💡 Hint: Consider the purpose of predicting demand.
True or False: Linear Programming can assist in making inventory management decisions.
💡 Hint: Think about how businesses make mathematical decisions.
1 more question available
Challenge Problems
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A retailer currently has 1,000 units of a product that they expect to sell 800 units in the next quarter. If the holding cost per unit is $5 and they want to reduce overstock by 15%, what will be their new target inventory?
💡 Hint: Calculate how much inventory is unnecessary using the excess from the forecast.
A grocery chain uses LP to determine the optimal order quantity for 4 products with varying sales trends. How can you structure their LP model to minimize costs while maintaining stock availability?
💡 Hint: Think about each product's demand and costs to structure the LP equation effectively.
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