A model and case study for efficient shelf usage and assortment analysis

Mehmet Fadılog̃lu (), Oya Karaşan () and Mustafa Pınar ()

Annals of Operations Research, 2010, vol. 180, issue 1, 105-124

Abstract: In the rapidly changing environment of Fast Moving Consumer Goods sector where new product launches are frequent, retail channels need to reallocate their shelf spaces intelligently while keeping up their total profit margins, and to simultaneously avoid product pollution. In this paper we propose an optimization model which yields the optimal product mix on the shelf in terms of profitability, and thus helps the retailers to use their shelves more effectively. The model is applied to the shampoo product class at two regional supermarket chains. The results reveal not only a computationally viable model, but also substantial potential increases in the profitability after the reorganization of the product list. Copyright Springer Science+Business Media, LLC 2010

Keywords: Retailing; Assortment optimization; Demand substitution (search for similar items in EconPapers)
Date: 2010
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DOI: 10.1007/s10479-008-0497-9

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