Model Perspective

Aug 20, 2022 · Operations

How a Simple Weekly Restocking Rule Reduces Piano Stockouts

This article models a piano retailer’s weekly demand as a Poisson process, applies a restocking policy that orders three units only when inventory hits zero, and uses a Markov chain to estimate a roughly 10% stockout probability and an average weekly sale of 0.857 units, while also exploring sensitivity to demand changes.