Do you have questions about Data Science?

We’d love to hear from you. 

Contact

Case study: Optimizing initial distribution

Especially for chain stores in the fashion industry, it is important to ensure that new products are available in each store in the sizes that are also in demand by customers. Most retailers use complex manual procedures to calculate the demand along with the associated inaccuracies. For a fashion retailer with more than 200 stores, COSMO CONSULT developed an optimization model that distributes quantities and sizes ideally and automatically to the individual stores. This made it possible to supply each individual store according to the respective demand, reduce residual stocks and significantly increase sales.

Key facts

  • Supplying the fashion retail industry according to the demand 
  • Optimizing demand based on past sales
  • Increasing margins and reducing residual stocks

Initial situation

The demand-based size distribution of products to individual stores has a large impact on the margin and is an ongoing challenge faced by fashion retailers.

The quantity and size distribution of a fashion retailer with around 200 stores had previously largely been carried out manually. For this purpose, the individual stores were divided into different classes, for example according store size. Each class was then assigned a predefined size key for each individual product group. This was then used to determine the delivery quantity of the new range of products.

However, there was no further differentiation between the different stores of a class. Also, changes in the shopping behaviors were not regularly analyzed.

COSMO CONSULT was commissioned to develop an automated algorithm that can efficiently determine the initial distribution to the individual stores under given constraints through intelligent data analysis and optimization algorithms.

Approach

The first step was to accurately analyze the sales and inventory data of the recent past for each product group. Thus, the project team considered the selling speed of each individual size of a product with respect to the other sizes. The result was implemented into a mixed-integer optimization model, which determined the profit-optimized distribution of the total quantity per store and size. Other restrictions were taken into account such as the minimum quantities per size and store and the delivery lots. These steps are now automated with regular runs.

Additional benefit

By analyzing and optimizing each store as well as the sales history and inventory data of each size, it was possible to supply each individual store according to the demand. At the same time, residual stocks were reduced and sales were significantly increased. The optimization process also takes into account more complex relationships when it comes to including a limited number of any lot types in the calculation. Due to the high degree of automation and the short calculation time, the solution can also be used at short notice to react optimally and quickly to order deviations for new deliveries.

Do you have questions about Data Science?

We’d love to hear from you. 

Contact

Ask our experts

COSMO CONSULT has many years of experience in providing digital solutions in the field of data science. Our services are based on a clear approach, detailed knowledge of business processes, and excellent product expertise. Our experts will be happy to advise you on the unique possibilities available to you when you use modern software technologies. Please give us a call! We look forward to talking with you on how your business can enter the digital age.

Contact Us!

COSMO CONSULT International

COSMO CONSULT SI GmbH
Lothringerstraße 14
1030 Wien
E-Mail
COSMO CONSULT
201 rue Carnot
94120 Fontenay-sous-Bois
+33 1 83010360
E-Mail
COSMO CONSULT
Schoenebergerstr. 15
10963 Berlin
+49 30 343815-0
+49 30 343815-111
E-Mail
COSMO CONSULT SPAIN, S.A.U.
Vallespir, 19 4ª Módulo 2
08173 Sant Cugat del Vallès, Barcelona
+34 902820242
E-Mail
COSMO CONSULT AB
Ralambsvaegen 17
11259 Stockholm
+46 8 7998660
E-Mail
COSMO CONSULT
Ruetistrasse 13
8952 Schlieren
+41 44 8306465
E-Mail
COSMO CONSULT Business S.L.
Presidente Riesco 5711, Oficina 802b
Las Condes, Santiago de Chile
+569 73769126
E-Mail
COSMO CONSULT Business S.L.
Avenida Cra. 45 # 114-78, Piso 6
Bogotá - Colombia
+57 320 7935148
E-Mail
COSMO CONSULT Business S.L
Checoslovaquia E10-105 y Eloy Alfaro
Quito, Ecuador
‪+593 99 608 4180
E-Mail
COSMO CONSULT Business S.L.
Rodolfo Gaona 81 Piso 7
Colonia Lomas de Sotelo
México, D.F. 11200
+52 55 2452-9200
E-Mail
Edificio Magel, Segundo Piso
Ave Samuel Lewis, Urb. Obarrio,
Ciudad de Panamá, República de Panamá
+507 62800343
E-Mail