Inventory Management Model for Stockout Based Substitutable Products

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2 Scopus citations


In the apparel market's dynamic environment, fashion firms aim to successfully forecast both the desirability of new collections and the volume of each item to be produced and released in the market under conditions of uncertainty. This research study proposes an inventory-management model developed for substitutable products (sold in several versions or colors) under competitive settings (each retailer sells a single product). The model focuses on stockout based and dynamic based substitutions in inventories. In other words, if there is no inventory of the desired product, the customer will choose to purchase the substitutable product. The model aims to maximize the profits of firms while considering the demand across substitutable products. Under competitive conditions, both retailers will always order positive inventory so as not to lose customers. In addition, an empirical analysis for sales of substitutable items (a product that is offered in different colors) of an online apparel retailer is conducted to empirically estimate the demand distribution.

Original languageEnglish
Pages (from-to)613-618
Number of pages6
Issue number10
StatePublished - 2022
Event10th IFAC Conference on Manufacturing Modelling, Management and Control, MIM 2022 - Nantes, France
Duration: 22 Jun 202224 Jun 2022

Bibliographical note

Publisher Copyright:
© 2022 The Authors. This is an open access article under the CC BY-NC-ND license (


  • Dynamic based substitution
  • Game theory
  • Inventory
  • Stockout based substitution
  • Supply chain


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