Determination of Stock for Sales Promotions

This paper describes the solution of the practical problems encountered by a Company when a product is made and sold for a limited promotional period only. The production and inventory control aspects are considered and a system aimed at the reduction of obsolescence costs is described which is based on a model of the demand pattern which uses a Gompertz exponential growth curve. Under pressure for an early improvement from the organisation, a system based on an empirical model was implemented, as an interim measure, which achieved a considerable improvement in performance. The Gompertz model has now been put into operation and the results of a simulation model are presented indicating that further improvements can be achieved.