Magazine Supply Optimization: a Case-study
This addresses supply planning challenges for magazine publishers, though it is incremental as it builds on existing optimization methods with domain-specific adaptations.
The paper tackles magazine supply optimization by introducing AthenIA, a solution that uses a novel group conformalized quantile regression method and optimization techniques to plan supply for over 20,000 points of sale in France, balancing out-of-stock and over-supply costs.
Supply optimization is a complex and challenging task in the magazine retail industry because of the fixed inventory assumption, irregular sales patterns, and varying product and point-of-sale characteristics. We introduce AthenIA, an industrialized magazine supply optimization solution that plans the supply for over 20,000 points of sale in France. We modularize the supply planning process into a four-step pipeline: demand sensing, optimization, business rules, and operating. The core of the solution is a novel group conformalized quantile regression method that integrates domain expert insights, coupled with a supply optimization technique that balances the costs of out-of-stock against the costs of over-supply. AthenIA has proven to be a valuable tool for magazine publishers, particularly in the context of evolving economic and ecological challenges.