An Application of Newsboy Problem in Supply Chain Optimisation of Online Fashion E-Commerce

We describe a supply chain optimization model deployed in an online fashion e-commerce company in India called Myntra. Our model is simple, elegant and easy to put into service. The model utilizes historic data and predicts the quantity of Stock Keeping Units (SKUs) to hold so that the metrics "Fulfilment Index" and "Utilization Index" are optimized. We present the mathematics central to our model as well as compare the performance of our model with baseline regression based solutions.