A two-stage stochastic programming model for assortment optimisation

Khaled N. Alqahtani and Nazrul I. Shaikh

International Journal of Applied Management Science, 2019, vol. 11, issue 3, 185-209

Abstract: This paper presents a two-stage stochastic programming model for retail assortment optimisation. Decisions related to what products to stock and in what quantity are taken in the first stage while decisions related to what products to use to satisfy the primary versus the secondary demand are taken in the second stage. Such a model is very useful for online retailers and catalogue merchants who witness a gap between an order arrival and fulfilment. A case study illustrating the modelling approach and its benefits as compared to other existing assortment optimisation techniques is also presented.

Keywords: stochastic programming; assortment planning; retail; demand substitution; two-stage models. (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ids:injams:v:11:y:2019:i:3:p:185-209

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