Managing Inventory as an Option and Impact on Unsold Product Policy: Sample of Textile Industry

Market share of unsold or discounted products is a significant-size market: more than 30% in clothing industry, more than 15% in technology sector. A this time, managing unsold products is an "ex post" science. What do we mean by such a definition? We mean that such level of volume is a result. This mean that at any moment, people in charge seems to accept the situation without thinking to a policy that limits the weight of unsold products. Reducing inventory is not the "solution" because reducing inventory is reducing both future unsold products but also successful ones (you will read later that a reduce inventory associated to a "at disposal" service policy with our developments will be more successful).The main problem is, in our point of view, that theoricians of finance have always considered inventory as a charge (such a thing is absurd in an accounting matter). That is to say that an inventory has no value and if by chance it has one at the beginning, there is no way to evaluate its variation (we mean variation during the time). We show an inventory internal value does exist because inventory is an option so it is possible to dynamically valuate it and in association with consumers & firms behaviour microeconomics analysis, we demonstrate that such a method can help to reduce unsold product inventory with "an ex ante" price policy or quantity adaptation