The Young Professional Dream Company's Stochastic Inventory Management Problem

The Young Professional Dream Company's Stochastic Inventory Management Problem

  • Case
  • Teaching Notes
  • Supplementary Resources
Abstract

The purpose of this case is an introduction to students who are interested in the area of operations management, particularly in inventory control, pertinent to lot sizing in a stochastic environment and the effect of flexible contracting vis-à-vis minimum Order Quantity Commitment (OQC) and expedited-delivery options. We present an example where a small start-up e-commerce company with limited budget explores a specific segment of market, namely electric appliances. The company provides online sales for only one season, and it procures multiple products at the beginning of the season. The goal of the company is to select among various products and allocate its limited budget to maximize the company's profit.

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