Ordering and production planning of apparel variants under quick response
摘要
The apparel industry has long struggled with profit losses from stockouts of popular items and excess inventory of unsold ones. Quick Response (QR) offers a remedy by allowing retailers to place firm orders closer to the selling season and to delay commitments to variants such as colors, sizes, or styles of a generic design. In this paper, we present an analytical model to study the ordering and production planning of apparel variants in the context of QR. We model a retailer’s and a supplier’s decision-making problems using dynamic programming formulations and show that both optimization problems are concave. Our analysis shows that the retailer consistently benefits from QR by reducing mismatch costs across variants, while the impact on the supplier is mixed. Numerical experiments demonstrate that QR improves their profitability when expedited production is not much costlier than regular production, when wholesale prices are relatively high, when demand correlation across variants tends to be negative, or when demand forecasts become more accurate. Finally, we examine a minimum order quantity arrangement and find that, within a range of baseline order quantities, both parties achieve higher profits than under the traditional practice.