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UBC Theses and Dissertations
Inventory control in the retail sector : A case study of Canadian Tire Pacific Associates Kapalka, Brian Anthony
Abstract
Canadian Tire Pacific Associates owns and operates 21 retail stores in the lower mainland of British Columbia and a central warehouse in Burnaby. In this thesis, we formulate a single-product, single-location model of its inventory system as a first step in developing an integrated, interactive inventory control system. Specifically, we formulate a Markov chain model for a periodic review system with a deterministic lead time and lost sales. The model utilizes empirical demand data to calculate the long-run average cost of inventory for a given (s,S) policy. We then develop a heuristic that locates a "near" optimal policy quickly. The heuristic incorporates a constraint on the customer service level, makes use of an updating technique for the transition probability matrix, and is based on assumptions regarding the properties of the solution space. Next, we create a prototype of the interface that enables managers to use the model interactively. Finally, we compare the existing inventory policy to the optimal policy for each of 420 products sold at one of the stores. This thesis finds that Canadian Tire Pacific Associates is currently holding excessively large in-store inventory and that it could reduce its cost of inventory by approximately 40% to 50%. We estimate that implementing optimal inventory control in the stores would result in annual savings of between $5.5 and $7 million.
Item Metadata
Title |
Inventory control in the retail sector : A case study of Canadian Tire Pacific Associates
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Creator | |
Publisher |
University of British Columbia
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Date Issued |
1995
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Description |
Canadian Tire Pacific Associates owns and operates 21 retail stores in the lower
mainland of British Columbia and a central warehouse in Burnaby. In this thesis, we formulate
a single-product, single-location model of its inventory system as a first step in developing an
integrated, interactive inventory control system. Specifically, we formulate a Markov chain
model for a periodic review system with a deterministic lead time and lost sales. The model
utilizes empirical demand data to calculate the long-run average cost of inventory for a given
(s,S) policy. We then develop a heuristic that locates a "near" optimal policy quickly. The
heuristic incorporates a constraint on the customer service level, makes use of an updating
technique for the transition probability matrix, and is based on assumptions regarding the
properties of the solution space. Next, we create a prototype of the interface that enables
managers to use the model interactively. Finally, we compare the existing inventory policy to
the optimal policy for each of 420 products sold at one of the stores. This thesis finds that
Canadian Tire Pacific Associates is currently holding excessively large in-store inventory and
that it could reduce its cost of inventory by approximately 40% to 50%. We estimate that
implementing optimal inventory control in the stores would result in annual savings of between
$5.5 and $7 million.
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Extent |
6403557 bytes
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Genre | |
Type | |
File Format |
application/pdf
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Language |
eng
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Date Available |
2009-01-14
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Provider |
Vancouver : University of British Columbia Library
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Rights |
For non-commercial purposes only, such as research, private study and education. Additional conditions apply, see Terms of Use https://open.library.ubc.ca/terms_of_use.
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DOI |
10.14288/1.0086746
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URI | |
Degree | |
Program | |
Affiliation | |
Degree Grantor |
University of British Columbia
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Graduation Date |
1995-05
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Campus | |
Scholarly Level |
Graduate
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Aggregated Source Repository |
DSpace
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Item Media
Item Citations and Data
Rights
For non-commercial purposes only, such as research, private study and education. Additional conditions apply, see Terms of Use https://open.library.ubc.ca/terms_of_use.