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Improved Retail Logistics Inventory through an Examination of Merchandise Flow and Space Planning – UA07-SAMS

Sponsor:

Sam’s Club

Research Team:

Scott J. Mason, Russell D. Meller

Universities Involved:

University of Arkansas

Start Date:

05/14/07

End Date:

05/13/08

Summary:

This project models the current inventory system and vendor order requirements within Sam’s Club, conduct experimental studies to examine the impact of vendor settings and operational policies on inventory levels and system costs, and lastly develops a decision support tool
The UA research team is conducting research to develop a decision support tool to be used to reduce the cost of merchandise as it flows within the Sam’s Club supply chain. Currently, agreements are negotiated between external vendors and Sam’s Club buyers pertaining to items to be sold in Sam’s Club stores. These agreements include the transportation mode, weight limits, pallet shipments, etc., which, along with Sam’s Club’s own constraints related to shelf space, add additional constraints to the Sam’s Club supply chain. Therefore, the main objective of the research project is to investigate the impact of these vendor contractual agreements on the current Sam’s Club inventory system with the goal of maintaining (or increasing) the service capability of replenishment, while at the same time reducing the amount of system inventory. The first phase of the project involves developing a model that represents the current inventory system and vendor order requirements. This model will then be used in the second project phase to conduct experimental studies to examine the impact of vendor settings and operational policies on inventory levels and system costs.