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Ordering System

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HELSINKI UNIVERSITY OF TECHNOLOGY Department of Industrial Engineering and Management Laboratory of Industrial Management

Carl Michael Falck

Efficient Store Ordering

Thesis submitted in partial fulfillment of the requirements for the degree of Master of Science in Engineering Espoo, May 26, 2005

Supervisor: Instructor:

Kari Tanskanen Johanna Småros

Professor of Industrial Management Master of Science in Technology

HELSINKI UNIVERSITY OF TECHNOLOGY

ABSTRACT OF MASTER’S THESIS

Author: Carl Michael Falck Subject of the Thesis: Efficient Store Ordering Pages: 60 Date: May 26, 2005 Location: TU Code: TU-22 Industrial Management

Professorship: Industrial Management Supervisor: Professor Kari Tanskanen Instructor: Johanna Småros, Master of Science (Tech.)

Automated store ordering has been offered as a potential solution to many store level problems: Automation could improve availability, decrease inventories, and reduce the time and labor required for ordering. However, despite the potential advantages, it seems that the majority of retailers have only just started to implement automated ordering systems at store level. Furthermore, very little published information can be found on store level processes, not to mention automated store ordering. Therefore, well-documented research on how and if conventional inventory management practices can be applied at store level operations should be extremely engrossing both from academic and business viewpoints. This master’s thesis examines how automated store ordering could more efficiently be utilized to improve store operations and performance. The problem is approached first from the theoretical viewpoint: In the literature review, the retail supply chain and store level processes and performance are examined. Furthermore, inventory management and forecasting practices as well as their application in retailing are reviewed. The empirical work in the thesis consists of a part where survey...