Optimization of Inventory Allocation
The Big Ideas
In the complex omnichannel world of retail, efficiently allocating inventory to fulfillment centers is essential for creating a positive customer experience and for minimizing costs.
Allocating inventory to retail fulfillment centers requires forecasting total demand across the entire market and forecasting demand specific to sub-regions of the market (e.g. states, DMAs, or sales regions).
There is uncertainty associated with these forecasts stemming from two sources: uncertainty in consumer behavior as described by the forecasting model and uncertainty about the model itself. Current inventory