What is it ?
Promotions are common nowadays. They generate higher sales volume and higher product varieties.
Challenges remains high though for inventory management. Inaccurate planning can lead to excess inventory at the end of the promotion or dissatisfied customers due to product unavailability.
Promotional planning is vital for retailers to maximize both profit and customer satisfaction.
Promotions can be of broadly two types:
• Stock-clearance (Inventory reduction) or single purchase.
• Regular sales promotion.
While in the first case, replenishment planning is not that important (except where a stock reconciliation is needed), in the latter case retailers must plan for adequate stock to meet customer demand.
Some Practical Aspects
• Response time at the upstream stages for the changes in downstream demand.
• Purchasing from multiple sources :
– Bulk purchase with discounts
– Multi-supplier products
– Outside staging
– Alternate sources inside the supply chain
• Multiple deliveries
Methodology
