Burton’s Wine Cellar is a retail outlet committed to wine enthusiasts. The store carries amyriad
choice of wine brands extending from “value wine” to generally elite brands for more perceiving wine
drinkers. BWS is very pleased of its broad inventory because it permits for brand substitution within the
occasion that a customer’s essential choice is supplied out. As a result, a sale is once in a while
completely lost from stockouts. BWC management is aware that intermittent stockouts might lead to
dissatisfied and displeased clients which may eventually lead to decreases in income. Therefore, BWC
management aims to maintain inventory at a level of 95% confidence that they will progress through the
order cycle without any brand stockouts.
Figure 1.
Due to the large number of brands available at BWC, management has decided to utilize a fixed–
order-period model to replenish inventory. While BWC maintains a running inventory count from sales
records, they also conduct periodic physical inventory counts. Physical inventory counts are critical for
BWC due to legal regulations surrounding the sale of alcohol as well as incidental losses from the
breakage of bottles. Therefore, BWC management believes that allowing for more than eight weeks
between physical inventory counts for reordering purposes would not be feasible.
The variety of wine brands makes storage difficult as boxes usually have numerous brands