Assortment planning, space assignment and shelf location model
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Abstract
Introduction: Retailer’s operational decisions imply that through its assortment the demand can be satisfied achieving the highest possible profit making the best possible use of its exhibition space. This article presents a mixed integer linear programming model which main purpose is to maximize the profit of a retailer considering the effects of substitution between the items, space elasticity, service levels and buyer’s decisions.
Objective: To propose a decision model for space allocation, assortment planning and shelf location for a retailer.
Method: First different factors that affect the decisions under study are analyzed using primary and secondary sources. Then the formulation of the model is proposed and its performance is evaluated using real data from a product category at a retailer’s point of sale.
Results: For the test instance, the optimal solution was obtained in a reasonable computational time and the solution presents the best way to manage the assortment at the point of sale, improving the results of the current method.
Conclusions: The proposed model allows increasing the profitability of the chain through the selection of the appropriate assortment, with fair exhibition spaces and suggesting the exact location of the items.
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https://orcid.org/0000-0002-0279-7565
