Deeksha,
Ruchika,
- Student, Department of Applied Mathematics, Delhi Technological University, Delhi, India
- Student, Department of Applied Mathematics, Delhi Technological University, Delhi, India
Abstract
The finished goods, raw materials, and product stock that a business has on hand for sale are referred to as inventory. They enable the companies to achieve their sales levels and are a chance to cost control and decision making. It is a huge asset to a manufacturing firm. Inventory model permits forecasting of quantities of raw material, inventory and spare parts of the equipment to a very high level of precision and risk attached. Henceforth, the need for accurate inventory models to maintain the optimal amount of stock becomes inevitable. Effective inventory management is essential to supply chain effectiveness, particularly in the retail industry where customer expectations for service quality and demand volatility are high. Retail chains face the dual challenge of minimizing inventory costs while maximizing customer satisfaction through product availability. To address this, two principal inventory modeling paradigms are widely used: deterministic and probabilistic models. The Economic Order Quantity (EOQ) and other deterministic models depend on steady, predictable demand trends. In contrast, probabilistic models, like the Newsvendor and Safety Stock models, account for uncertainty in demand and lead times. This research paper presents a comparative performance analysis of deterministic and probabilistic inventory models applied in retail chains, focusing on Walmart and Zara as representative case studies. Walmart employs a deterministic Economic Order Quantity (EOQ) model to optimize inventory costs, while Zara utilizes probabilistic models such as the Newsvendor and Safety Stock models to manage demand uncertainty in the fast-fashion industry. The benchmarking results highlight the adaptability of each model to different retail supply chain structures, providing insights for optimizing inventory management strategies.
Keywords: Inventory Management, Retail Chains, Deterministic Models, Probabilistic Models, EOQ, Newsvendor Model, Safety Stock, Supply Chain, Zara, Walmart.
[This article belongs to Recent Trends in Mathematics ]
Deeksha, Ruchika. Comparative Performance Study: Deterministic vs. Probabilistic Models in Retail Chains. Recent Trends in Mathematics. 2025; 02(01):1-6.
Deeksha, Ruchika. Comparative Performance Study: Deterministic vs. Probabilistic Models in Retail Chains. Recent Trends in Mathematics. 2025; 02(01):1-6. Available from: https://journals.stmjournals.com/rtm/article=2025/view=226022
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| Volume | 02 |
| Issue | 01 |
| Received | 24/06/2025 |
| Accepted | 17/09/2025 |
| Published | 17/09/2025 |
| Publication Time | 85 Days |
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