Given the difficult nature of making purchase decisions, a linear programming model has been formulated to consider demand, space, and capital spending constraints. It is primitive, with a lot more research required to make the model more meaningful, but it serves its purpose. While the model’s objective function is to maximize profits, it seems to be also useful for a store that may be relocating with new space constraints; finding the optimal mix of inventory given the new space constraints, while assuming demand holds constant. Additionally, it seems useful in looking at how spending constraints affect the optimal mix or even how changing the layout may be affected. For example, seeing how the mix changes when available capital for particular product categories changes or seeing what the optimal mix will be if the space allocated for the class of products is changed.
Something that complicates this model is the problem of inventory obsolescence. The demand that is input as a constraint is a result of previous demand, and the model does not consider the fact that as items become less popular so does the need for that item. Therefore, historical demand data is not necessarily ideal and a more appropriate approach for calculating an optimal mix may be achieved through the use of a continuous order period model, Stochastic Programming, or simulation. Stochastic Programming models allow the information to be evaluated under uncertain conditions and allow for probability assumptions; in this case demand. Demand is receiving such an emphasis given the large degree of uncertainty and variability, and because it is the only uncertain element within our model. It should also be noted that this model is for single order period decisions, which does not allow the model to consider excess inventory existing as a result of previous order periods. Further research is required to transition the present LP model to a Stochastic Programming (SP) model.
In addition to the aforementioned, it should be noted that the model has not been tested or proven, as this would require more extensive research. At this point the results are theoretical and strictly for academic purposes. However, there appears to exist a great opportunity to conduct further research with the possibility of creating software that not only considers the proposed LP/SP model, but also integrate the software with other useful business models (i.e. EOQ, ABC, Yield Management, and price sensitivity tools) and possibly add an ability for the software to establish optimal delivery routes given orders as they occur; as a result of point of sale data as sales occur. In searching the Internet, there does not seem to be a software package specifically for the furniture industry that facilitates all of these business necessities. Moving forward:
The objective function of this model is to maximize (net) profits, mathematically presented as follows:
According to the G20 Entrepreneurship Barometer, created by accountants EY, the UK is the best European country for entrepreneurs, thanks to our tax systems, laws and skilled workforce.
As the G20 Leaders Summit got underway yesterday, the UK was revealed as the second best place in the G20 for people to access business funding, beaten only by the US. A report by accountants EY claims the UK is a business-friendly nation due to its competitive tax system, its laws which are sympathetic to entrepreneurs and its skilled workforce.
To produce its G20 Entrepreneurship Barometer, EY quizzed more than 1,500 entrepreneurs including 55 based in Britain. The survey results are then used to rank each G20 nation on funding, culture, tax and regulation, support and education and training.
The UK appears in Quartile 1, meaning it is in the top quarter for fostering entrepreneurship alongside other business friendly nations – Australia, Canada, South Korea and the US. The UK is the highest ranking European country, beating Germany and France, which appear in Quartile 2.
Stuart Watson, Partner at EY, says: “The foundations for a strong entrepreneurial ecosystem are already well established in the UK, with fast growth businesses accounting for nearly 60% of all new jobs.
“Targeted incentives for investment and research and development, one of the lowest corporate tax rates in the G20 by 2015, and positive interventions like Funding for Lending, all help send a clear message that Britain is open for business.”
One of the areas the UK performed particularly well in was fostering an entrepreneurial culture. An impressive seven out of 10 business people in the UK feel their efforts are supported by their country, compared with an average of 57% across all the G20 countries.
Television programmes including the BBC shows Dragons’ Den and The Apprentice have been credited for helping encourage people to become business-minded.
Mr Watson says: “There has been a real shift in the perception of entrepreneurs over the last 10 years. The advent of popular TV shows and well known business personalities has undoubtedly had an impact on the number of young people who now list ‘entrepreneur’ as a career aspiration.”
At Bizspace, we work hard to make life easier for entrepreneurs and start-up businesses. By providing flexible accommodation at affordable prices, without asking customers to sign long-term fixed leases, we are making it simpler for people to find the premises they need for their company.
Customers can quickly change to an alternative workspace if they find they need more or less space. And our new co-working initiative, The Work Lounge, provides a great place for entrepreneurs to work alongside like-minded people if they are not yet at the stage of needing their own unit.