Bayesian Inventory Planning with Imperfect Demand Estimation in Online Flash Sale

Ted Tao Yuan, Michelle Cai, Daniel Kao

2016

Abstract

Daily deal, or flash sale, websites offer limited quantity of selected brands and products for a short period of time. The idea is that short-term sales event of branded products drives consumer interest. Flash sale sites like vip.com negotiate great deals from various vendors on a limited quantity of selected products. In operation, all merchandises need to be allocated to regional warehouses before a short-term sales event starts. The variety and quantity of merchandises change significantly from one sales event to another. Unsold items are typically shipped back to vendors after the sales event ends. In this paper, we discuss the design and implementation of a regional warehouse merchandise allocation model and strategy to maximize sales conversion rate. Our work reveals the uniqueness of inventory planning of flash sale and its similarity to that of general online retailers. Our machine learning prediction models and Bayesian Updating strategy are highly valuable to the improvement of regional warehouse efficiency and customer experience in dealing with highly volatile flash sale inventory.

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Paper Citation

in Harvard Style

Tao Yuan T., Cai M. and Kao D. (2016). Bayesian Inventory Planning with Imperfect Demand Estimation in Online Flash Sale . In Proceedings of 5th the International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES, ISBN 978-989-758-171-7, pages 343-348. DOI: 10.5220/0005632303430348

in Bibtex Style

@conference{icores16,
author={Ted Tao Yuan and Michelle Cai and Daniel Kao},
title={Bayesian Inventory Planning with Imperfect Demand Estimation in Online Flash Sale},
booktitle={Proceedings of 5th the International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES,},
year={2016},
pages={343-348},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0005632303430348},
isbn={978-989-758-171-7},
}

in EndNote Style

TY - CONF
JO - Proceedings of 5th the International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES,
TI - Bayesian Inventory Planning with Imperfect Demand Estimation in Online Flash Sale
SN - 978-989-758-171-7
AU - Tao Yuan T.
AU - Cai M.
AU - Kao D.
PY - 2016
SP - 343
EP - 348
DO - 10.5220/0005632303430348