Note on the backroom effect in retail operations
Date
2015
Authors
Atan, Z.
Erkip, N.
Editor(s)
Advisor
Supervisor
Co-Advisor
Co-Supervisor
Instructor
Source Title
Production and Operations Management
Print ISSN
1059-1478
Electronic ISSN
1937-5956
Publisher
Wiley-Blackwell
Volume
24
Issue
11
Pages
1833 - 1834
Language
English
Type
Journal Title
Journal ISSN
Volume Title
Series
Abstract
Eroglu et al. (2013) study a retailer with limited shelf capacity and a backroom. They study a continuous review (r, q) ordering policy with a known order quantity, q. Assuming that backorders can be satisfied from the backroom inventory (if available), they find the expression for the optimal reorder level, r. Our work builds on Eroglu et al. (2013). We correct an erroneous derivation of the expected overflow term, as well as derive an exact expression for the expected cost function, and hence optimal reorder level, instead of the approximate one used by Eroglu et al.