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Decision Support Tool For Retail Shelf Space Optimization

Author

Listed:
  • B. RAMASESHAN

    (School of Marketing, Curtin University of Technology, Bentley 6102, Western Australia)

  • N. R. ACHUTHAN

    (Department of Mathematics and Statistics, Curtin University of Technology, Bentley 6102, Western Australia)

  • R. COLLINSON

    (Department of Mathematics and Statistics, Curtin University of Technology, Bentley 6102, Western Australia)

Abstract

Efficient allocation of shelf space and product assortment can significantly improve a retailer's profitability. This paper addresses the problem from the perspective of an independent franchise retailer. A Category Management Decision Support Tool (CMDST) is proposed that efficiently generates optimal shelf space allocations and product assortments by using the existing scarce resources, resulting in increased profitability. CMDST utilizes two practical integrated category management models that maximize the total net profit in terms of decision variables expressing product assortment, shelf space allocation, review period, and order quantity. The implementation of the models demonstrates their robustness and that the net profit can be significantly increased when compared to the current industry practice.

Suggested Citation

  • B. Ramaseshan & N. R. Achuthan & R. Collinson, 2008. "Decision Support Tool For Retail Shelf Space Optimization," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 7(03), pages 547-565.
    • Handle: RePEc:wsi:ijitdm:v:07:y:2008:i:03:n:s0219622008003046
    DOI: 10.1142/S0219622008003046
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    Citations

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    Cited by:

    1. Alexander Hübner & Kai Schaal, 2017. "Effect of replenishment and backroom on retail shelf-space planning," Business Research, Springer;German Academic Association for Business Research, vol. 10(1), pages 123-156, June.
    2. Bianchi-Aguiar, Teresa & Hübner, Alexander & Carravilla, Maria Antónia & Oliveira, José Fernando, 2021. "Retail shelf space planning problems: A comprehensive review and classification framework," European Journal of Operational Research, Elsevier, vol. 289(1), pages 1-16.
    3. Cheng, Kuo-Tai, 2016. "Test of the mediating effects of regulatory decision tools in the communications regulator," Telecommunications Policy, Elsevier, vol. 40(2), pages 277-289.
    4. Eisend, Martin, 2014. "Shelf space elasticity: A meta-analysis," Journal of Retailing, Elsevier, vol. 90(2), pages 168-181.
    5. Hübner, Alexander H. & Kuhn, Heinrich, 2012. "Retail category management: State-of-the-art review of quantitative research and software applications in assortment and shelf space management," Omega, Elsevier, vol. 40(2), pages 199-209, April.

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