ABSTRACT
In this chapter, we investigate two fundamental inventory models in fashion retail supply chains. To be specific, first we examine the EOQ model and its applications in fashion retailing. Second, we examine the newsvendor problem and discuss how it relates to fast fashion retailing. For both models, numerical illustrative examples are included to better present the ideas. After discussing these two classical models, we proceed to examine the coordination challenge in the fashion retail supply chain systems. We prove that owing to doublemarginalization effect, the fashion retail supply chains under both the EOQ-based model and the newsvendor problem -based model will not be coordinated by itself under a decentralized setting. We then discuss some measures to achieve coordination. In particular, we demonstrate with analytical proof how the commonly seen contracts can be applied to coordinate the fashion retail supply chains. Insights are discussed.
