𝐌𝐢𝐧-𝐌𝐚𝐱 𝐯𝐬 𝐃𝐞𝐦𝐚𝐧𝐝-𝐁𝐚𝐬𝐞𝐝 𝐒𝐭𝐨𝐫𝐞 𝐑𝐞𝐩𝐥𝐞𝐧𝐢𝐬𝐡𝐦𝐞𝐧𝐭: 𝐖𝐡𝐚𝐭 𝐀𝐜𝐭𝐮𝐚𝐥𝐥𝐲 𝐖𝐨𝐫𝐤𝐬?

 

In retail, few decisions are as quietly powerful as store replenishment logic. While it may sit within supply chain or inventory management teams, the ripple effect of replenishment reaches far beyond warehouses and stockrooms. It influences sell-through rates, stock availability, markdown pressure, working capital deployment, and ultimately the customer’s experience in-store and across channels.

Yet, many retailers inherit their replenishment model rather than strategically choosing it. Min-Max logic has long been the default approach because it is simple, structured, and predictable. On the other hand, demand-based replenishment promises dynamic responsiveness, using historical sales data and forecasting to adjust stock levels in real time. As retail networks grow and omnichannel complexity increases, this shift toward more data-driven models has accelerated.

But the real conversation is not about replacing one method with another. It is about alignment.

Min-Max can perform exceptionally well in stable, predictable categories where demand patterns are consistent and store networks are manageable. Demand-based replenishment, meanwhile, can unlock greater efficiency in volatile, seasonal, or trend-driven categories, provided the retailer has the data maturity, system integration, and governance discipline to support it.

The challenge arises when replenishment logic does not match retail complexity. Static thresholds can create excess stock in slower stores and stockouts in faster ones. Poorly calibrated forecasting can amplify errors across the network. As SKU counts and store counts increase, these misalignments become more expensive and harder to correct.

In this article, we examine Min-Max vs demand-based store replenishment in detail, how each model works, where each fits best, and what retailers should evaluate before making structural decisions. Because in modern retail, replenishment is not just an operational mechanism. It is a profitability lever.

Understanding the difference between these models is not about choosing the most advanced option. It is about building a replenishment framework that supports scale, protects margins, and strengthens operational discipline across the entire retail network.

Read the full article here

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