Merchandise Placement Optimization

Wei Ke ()
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Wei Ke: Columbia University

A chapter in Retail Space Analytics, 2023, pp 129-159 from Springer

Abstract: Abstract Physical placement of a retail SKU in the store is known to influence its demand. There are plenty of research and commercial solutions that solved for the optimal planogram, but very few focused on addressing the assignment problem that determined the best physical location of every displayed SKU in a store. In this chapter, we propose a heuristic algorithm, called “Plan Modification Optimization,” to solve the NP-hard placement optimization problem that is also difficult to fully specify due to the presence of arbitrary business rules. We also consider a biclustering methodology that correlates the locational sensitivity of a SKU with the inherent financial impact of a location, thereby providing the foundation for forecasting the financial consequence of a move that was not historically observed.

Date: 2023
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DOI: 10.1007/978-3-031-27058-1_7

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