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Breadth of range and depth of stock: forecasting and inventory management at Euro Car Parts Ltd

Author

Listed:
  • F R Johnston

    (Euro Car Parts)

  • E A Shale

    (University of Warwick)

  • S Kapoor

    (Euro Car Parts)

  • R True

    (Euro Car Parts)

  • A Sheth

    (Euro Car Parts)

Abstract

This paper investigates inventory management issues in a distribution network. The study is motivated by examining the operation of a wholesaling car parts company. Customer service requirements are of paramount importance in this market sector. The nature of the demand facing the company is characterised. The breadth of range of stock keeping units (SKUs) held at a stocking location and the quantity of each SKU held are normally treated in isolation but in this case, the rule developed to select the range of SKU was extended to determine the level of stock to hold. It is intuitively obvious that these two factors should be linked, yet the authors have not found any other literature developing the connection in a practical context. Forecasting issues are explored as the rule on stock range depends on a forecast of the number of orders received for each SKU at each stocking unit. Some implementation issues and extensions are indicated.

Suggested Citation

  • F R Johnston & E A Shale & S Kapoor & R True & A Sheth, 2011. "Breadth of range and depth of stock: forecasting and inventory management at Euro Car Parts Ltd," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(3), pages 433-441, March.
    • Handle: RePEc:pal:jorsoc:v:62:y:2011:i:3:d:10.1057_jors.2010.189
    DOI: 10.1057/jors.2010.189
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    References listed on IDEAS

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