Our pioneering research in the domain of dynamic fashion retailer order quantity and price markdown optimization models and algorithms began at the University of Florida with the inputs our principal researcher Dr. Murali K Mantrala received from retail merchandise managers at a major US retailer. This led to the development of the mathematical model MARK that has now evolved to form the analytical core underlying “B_Line”. This research has been reported at various stages, most recently in the May 2001 special issue on “Marketing Engineering” of Interfaces, the applications journal of the Institute for Operations Research and Management Science (INFORMS). This research was greatly aided by inputs from fashion merchandising executives and Buyers at a number of US department stores and specialty retailers.

Selected buyers worked with the research team led by Dr. Mantrala during the mathematical model development and refining phases and provided crucial insights into the field requirements. Subsequently, the model was tested using real life data from the field.

Frequently, B_Line came up with counter-intuitive, apparently surprising strategies that yielded substantially superior results i.e. strategies generating higher profitability at lower outlays compared to intuitive strategies currently followed in stores. The Buyers on further reflection came to appreciate why these strategies were superior to their own intuitive period-by-period tactics and came to appreciate that there was no way for them to manually achieve the same results.

Here are five fashion items that were picked for study. The participating buyers were asked to record their pricing decisions taken the way they currently are. The data on which they had based their decisions was then fed into the B_Line software and the results obtained. The comparison of the optimal solutions provided by B_Line and Intuitive projections of the buyers were as follows:

The buyers were unanimous in their view that B_Line could play a major role in making their markdown decisions more profitable.

Click on item below for details of case study

Skirts             Shorts             Suede miniskirts             Leggings             Shirts

A technical paper explaining the mathematical model underlying B_Line has been published in the May - June 2001 issue (special issue on Marketing Engineering) of Interfaces, the journal of INFORMS (the Institute for Operations Research and the Management Sciences).