Title: Retail shelf space allocation considering inventory replenishment

Authors: Hasmukh K. Gajjar; Gajendra Kumar Adil

Addresses: Indian Institute of Management Indore, Rau-Pithampur Road, Indore, 453556, India ' Shailesh J. Mehta School of Management, Indian Institute of Technology-Bombay, Powai, Mumbai, 400 076, India

Abstract: Shelf space allocation to products greatly impacts the profitability in a retail store. This paper makes two contributions to existing retail shelf space allocation problem. First, a nonlinear shelf space allocation model (NLSSAMINV) is developed incorporating inventory replenishment into an existing nonlinear shelf space allocation model (NLSSAM). Second, existing solution methods [dynamic programming algorithm (DPA) and local search heuristic (LSH)] developed to solve NLSSAM are suitably adapted for solving NLSSAMINV. A pre-processing routine is also developed to reduce the search space in DPA and LSH. It is found from experimental studies that due to pre-processing routine, DPA and LSH took less CPU time to solve NLSSAMINV than that required for solving NLSSAM.

Keywords: retail shelf space; shelf space allocation; inventory replenishment; retail stores; nonlinear modelling; dynamic programming; local search.

DOI: 10.1504/IJSOM.2015.071532

International Journal of Services and Operations Management, 2015 Vol.22 No.2, pp.221 - 234

Published online: 31 Aug 2015 *

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