Optimal Order Quantity for Football Jersey Inventory Under Normal and Seasonal Demand Using FlexSim

Abstract

Effective inventory management is critical for small to medium-sized (SMEs) retail businesses as they are usually facing demand fluctuations, especially for seasonal or promotional items. A case study of a football jersey retail shop in Pathum Thani has also experienced such a challenge, where they have relatively stable demand in normal months and fluctuating demand during football competition months. The shop typically orders a fixed quantity of 300 units during the normal period and 600 units during the seasonal period. However, this order strategy frequently leads to stockouts, resulting in lost sales opportunities and dissatisfied customers. Accordingly, the purpose of this study is to optimize and propose the order quantity strategy that balances stock levels. This study employs FlexSim, a discrete-event simulation software, to analyze and evaluate 14 scenarios of different order quantity strategies, testing different possible combinations of normal and seasonal order quantity values. The results show that Scenario 14 with a normal order quantity of 550 units and a seasonal order quantity of 950 units provided the optimal order quantity with 99.87% Releasing, 0.13% Empty, and no remaining inventory. Based on the results, this order quantity strategy minimizes stockouts while preventing excess stock accumulation, making it the most optimized order policy among the other 13 scenarios. The findings also highlight the importance of dynamic inventory control in optimizing inventory replenishment, where discrete-event simulation software (i.e., FlexSim) can be utilized by the SMEs in the retail industry in fine-tuning order quantity values corresponding to demand fluctuations. Hence, retail businesses can improve customer satisfaction through enhancing inventory efficiency.