Skip to main content

A seminar on "Market Basket Rules as Input to Improve Inventory Performance" at IME, IIT Kanpur

IME department organized a seminar on “Market Basket Rules as Input to Improve Inventory Performance” and invited Dr. Pradip Kumar Bala to deliver his valuable lecture on it. Dr. Bala is associate professor at IIT Roorkee in Department of Management studies. Dr. Bala introduced the association rules, also known as market basket rules, in the context of retail items.

Market basket rules have been widely used in marketing, shelf allocation in retail stores, web designing in commerce etc; however, according to him, the works on applications of these rules in the area of operations management have been limited so far. He mentioned that recently a few works with applications of market basket rules in inventory management have been applied. According to him, the knowledge of correlated items in the form of association rules can be of tremendous importance in designing inventory replenishment policies and hence, it must be accounted for. The research incorporated in his current work makes an attempt to account for demand correlation at transaction level in retail inventory management. The cost of joint replenishment for correlated items is often found to be much less than the total cost of individual item replenishment. However, just the knowledge of the names of items with correlated demand, and a type of relationship are not always sufficient. We need to know the probabilities or probability distribution of joint demand. When the number of items increases, the complexity of the demand relationship among the items increases dramatically, making it infeasible to calculate all probabilities of joint demand in advance.

To overcome this, he suggested to make use of the association rules which are mined from the past transaction data. The impact of association rules can be used to compute the profitability measure which forms the basis of grouping items with high probability of purchase in the same group. Replenishment policy can be designed for each group separately with higher profitability of inventory operation. The research suggests a measure for profitability index and an algorithm for grouping the items based on the profitability index.

Finally the seminar was wrapped up with queries from faculty and students of the department, which churned out some interesting perspectives and left the attendees with many issues to mull over.

Contributed by:

Vivek Agarwal
MBA, 2011-13
IIT Kanpur


Popular posts from this blog

Reflexions'19 - A Reflection on "Tackling challenges of the VUCA World" !!

The Department of Industrial Management and Engineering, IIT Kanpur presented the flagship event of Prabandhan – Reflexions on Sept 28th, 2019. The 3rd edition of the event on ‘Tackling challenges of the VUCA world' was concluded with a promising and on a cheerful note. With thunderous applause and riveting questions, the event opened to bridge the corporate world with the real world. Reflexions 3.0 saw the participation of 6 eminent industry leaders and management gurus to share their experiences from their respective trades. They were Karan Marwah, Partner – CFO, Advisory Services, KPMG, Harshavardhan Chauhan, Head-Marketing & digital transformation, DLF Shopping Mall, Neelesh Talathi, CFO, Pepperfry, Hari T N, CHRO, Big Basket, Raj Gupta, General Manager, HR, TCS and our very own Professor, Devlina Chatterjee, Managerial Economics, Applied Econometrics. The talk focused on "How well, can the industries predict the results of their actions in a world of Volatility, Unc

An Introduction to the batch of 2019-21

“ It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change. "                                   A new zeal, vigour, and an unquenchable thirst for proving oneself is what describes MBA batch of 2019-21. 52 of us set foot on the pavement of a new journey and needless to say it has been unprecedented. Be it the early morning presentations, the stark midnight deadlines, or the never-ending case studies covering the gamut of concepts and context, each one of these activities can vouch for it. It has hardly been a month, yet the batch has acclimatized well with the life of one the most coveted institutes in the country, IIT Kanpur. For most of us, this is the desired path, and for the rest, it is an opportunity to relive their school days. Since we are in a place that has no norm and instead offers endless diversity, there will always be something that entertains and challenges us. It is time we took this op

Mr. Praveen Tripathi, CEO of Magic 9 (Media and Analytic)

Mr Praveen Tripathi began the seminar by giving a brief introduction about the classification of households in India. Sir mentioned about the New Consumer Classification System (NCCS) in which there are 12 grades of classification varying from A1, A2, A3, B1, B2, C1, C2, D1, D2, D3, E1, E2, and E3. He contrasted it with the old classification system in which there were 8 grades only. The basic theme behind all this classification is the life score which is assigned to all the households. Life score is calculated based on the education of chief owner and consumer durable. And the discrimination is measured by the Larenz Curve and Gini coefficient. The major drawback of this system as mentioned by sir was that the consumer durable penetration changes faster than education or occupation level. “Inside every transaction there is a knowledge, you need to decode it.” With this quote sir gave a brief about television audience metrics in India which started with Doordarshan Audien