IDEAS home Printed from https://ideas.repec.org/a/eee/jouret/v86y2010i1p94-105.html
   My bibliography  Save this article

Retail Shelf Allocation: A Comparative Analysis of Heuristic and Meta-Heuristic Approaches

Author

Listed:
  • Hansen, Jared M.
  • Raut, Sumit
  • Swami, Sanjeev

Abstract

This research presents a retail shelf-space decision model that incorporates a nonlinear profit function, vertical and horizontal location effects, and product cross-elasticity. We propose a linear programming formulation of the nonlinear profit function that can solve the shelf-space problem optimally. We describe potential advances in heuristic and meta-heuristic algorithms and compare the approaches through simulations and a field experiment. We discuss the impact of the number of item facings, vertical location, and horizontal location (e.g., we find the vertical location effect is approximately double the size of the horizontal location effect on profit performance).

Suggested Citation

  • Hansen, Jared M. & Raut, Sumit & Swami, Sanjeev, 2010. "Retail Shelf Allocation: A Comparative Analysis of Heuristic and Meta-Heuristic Approaches," Journal of Retailing, Elsevier, vol. 86(1), pages 94-105.
    • Handle: RePEc:eee:jouret:v:86:y:2010:i:1:p:94-105
    DOI: 10.1016/j.jretai.2010.01.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0022435910000060
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jretai.2010.01.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Yang, Ming-Hsien, 2001. "An efficient algorithm to allocate shelf space," European Journal of Operational Research, Elsevier, vol. 131(1), pages 107-118, May.
    2. Hansen, Pierre & Heinsbroek, Hans, 1979. "Product selection and space allocation in supermarkets," European Journal of Operational Research, Elsevier, vol. 3(6), pages 474-484, November.
    3. Alain Bultez & Philippe Naert, 1988. "SH.A.R.P.: Shelf Allocation for Retailers' Profit," Marketing Science, INFORMS, vol. 7(3), pages 211-231.
    4. Yang, Ming-Hsien & Chen, Wen-Cher, 1999. "A study on shelf space allocation and management," International Journal of Production Economics, Elsevier, vol. 60(1), pages 309-317, April.
    5. Willy Gochet & Yves Smeers, 1979. "A Branch-and-Bound Method for Reversed Geometric Programming," Operations Research, INFORMS, vol. 27(5), pages 982-996, October.
    6. Bruce Golden & S. Raghavan & Daliborka Stanojević, 2005. "Heuristic Search for the Generalized Minimum Spanning Tree Problem," INFORMS Journal on Computing, INFORMS, vol. 17(3), pages 290-304, August.
    7. Hwang, Hark & Choi, Bum & Lee, Min-Jin, 2005. "A model for shelf space allocation and inventory control considering location and inventory level effects on demand," International Journal of Production Economics, Elsevier, vol. 97(2), pages 185-195, August.
    8. Urban, Timothy L., 2005. "Inventory models with inventory-level-dependent demand: A comprehensive review and unifying theory," European Journal of Operational Research, Elsevier, vol. 162(3), pages 792-804, May.
    9. Hariga, Moncer A. & Al-Ahmari, Abdulrahman & Mohamed, Abdel-Rahman A., 2007. "A joint optimisation model for inventory replenishment, product assortment, shelf space and display area allocation decisions," European Journal of Operational Research, Elsevier, vol. 181(1), pages 239-251, August.
    10. Andrew Lim & Brian Rodrigues & Xingwen Zhang, 2004. "Metaheuristics with Local Search Techniques for Retail Shelf-Space Optimization," Management Science, INFORMS, vol. 50(1), pages 117-131, January.
    11. Evan E. Anderson & Henry N. Amato, 1974. "A Mathematical Model for Simultaneously Determining the Optimal Brand-Collection and Display-Area Allocation," Operations Research, INFORMS, vol. 22(1), pages 13-21, February.
    12. Marcel Corstjens & Peter Doyle, 1981. "A Model for Optimizing Retail Space Allocations," Management Science, INFORMS, vol. 27(7), pages 822-833, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yan-Kwang Chen & Shi-Xin Weng & Tsai-Pei Liu, 2020. "Teaching–Learning Based Optimization (TLBO) with Variable Neighborhood Search to Retail Shelf-Space Allocation," Mathematics, MDPI, vol. 8(8), pages 1-16, August.
    2. Masoud Rabbani & Navid Salmanzadeh-Meydani & Amir Farshbaf-Geranmayeh & Vahed Fadakar-Gabalou, 2018. "Profit maximizing through 3D shelf space allocation of 2D display orientation items with variable heights of the shelves," OPSEARCH, Springer;Operational Research Society of India, vol. 55(2), pages 337-360, June.
    3. Gecili, Hakan & Parikh, Pratik J., 2022. "Joint shelf design and shelf space allocation problem for retailers," Omega, Elsevier, vol. 111(C).
    4. 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.
    5. Kateryna Czerniachowska, 2022. "A genetic algorithm for the retail shelf space allocation problem with virtual segments," OPSEARCH, Springer;Operational Research Society of India, vol. 59(1), pages 364-412, March.
    6. 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.
    7. Kateryna Czerniachowska & Krzysztof Michalak & Marcin Hernes, 2023. "Heuristics for the shelf space allocation problem," OPSEARCH, Springer;Operational Research Society of India, vol. 60(2), pages 835-869, June.
    8. Zhao, Ju & Zhou, Yong-Wu & Wahab, M.I.M., 2016. "Joint optimization models for shelf display and inventory control considering the impact of spatial relationship on demand," European Journal of Operational Research, Elsevier, vol. 255(3), pages 797-808.
    9. Alexander Hübner & Fabian Schäfer & Kai N. Schaal, 2020. "Maximizing Profit via Assortment and Shelf‐Space Optimization for Two‐Dimensional Shelves," Production and Operations Management, Production and Operations Management Society, vol. 29(3), pages 547-570, March.
    10. Bianchi-Aguiar, Teresa & Silva, Elsa & Guimarães, Luis & Carravilla, Maria Antónia & Oliveira, José F., 2018. "Allocating products on shelves under merchandising rules: Multi-level product families with display directions," Omega, Elsevier, vol. 76(C), pages 47-62.
    11. Flamand, Tulay & Ghoniem, Ahmed & Haouari, Mohamed & Maddah, Bacel, 2018. "Integrated assortment planning and store-wide shelf space allocation: An optimization-based approach," Omega, Elsevier, vol. 81(C), pages 134-149.
    12. Ostermeier, Manuel & Düsterhöft, Tobias & Hübner, Alexander, 2021. "A model and solution approach for store-wide shelf space allocation," Omega, Elsevier, vol. 102(C).
    13. Lotfi, M.M. & Torabi, S.A., 2011. "A fuzzy goal programming approach for mid-term assortment planning in supermarkets," European Journal of Operational Research, Elsevier, vol. 213(2), pages 430-441, September.
    14. Kim, Gwang & Moon, Ilkyeong, 2021. "Integrated planning for product selection, shelf-space allocation, and replenishment decision with elasticity and positioning effects," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).
    15. Tsao, Yu-Chung & Lu, Jye-Chyi & An, Na & Al-Khayyal, Faiz & Lu, Richard W. & Han, Guanghua, 2014. "Retailer shelf-space management with trade allowance: A Stackelberg game between retailer and manufacturers," International Journal of Production Economics, Elsevier, vol. 148(C), pages 133-144.
    16. Düsterhöft, Tobias & Hübner, Alexander & Schaal, Kai, 2020. "A practical approach to the shelf-space allocation and replenishment problem with heterogeneously sized shelves," European Journal of Operational Research, Elsevier, vol. 282(1), pages 252-266.
    17. 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.
    18. Mou, Shandong & Robb, David J. & DeHoratius, Nicole, 2018. "Retail store operations: Literature review and research directions," European Journal of Operational Research, Elsevier, vol. 265(2), pages 399-422.
    19. Hübner, Alexander & Schaal, Kai, 2017. "An integrated assortment and shelf-space optimization model with demand substitution and space-elasticity effects," European Journal of Operational Research, Elsevier, vol. 261(1), pages 302-316.
    20. Grandi, Benedetta & Burt, Steve & Cardinali, Maria Grazia, 2021. "Encouraging healthy choices in the retail store environment: Combining product information and shelf allocation," Journal of Retailing and Consumer Services, Elsevier, vol. 61(C).
    21. Caglar Gencosman, Burcu & Begen, Mehmet A., 2022. "Exact optimization and decomposition approaches for shelf space allocation," European Journal of Operational Research, Elsevier, vol. 299(2), pages 432-447.
    22. Yan-Kwang Chen & Fei-Rung Chiu & Hung-Chang Liao & Chien-Hua Yeh, 2016. "Joint optimization of inventory control and product placement on e-commerce websites using genetic algorithms," Electronic Commerce Research, Springer, vol. 16(4), pages 479-502, December.
    23. Kateryna Czerniachowska & Marcin Hernes, 2021. "Shelf Space Allocation for Specific Products on Shelves Selected in Advance," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 316-334.
    24. Yuli Zhang & Hyokjin Kwak & Marina Puzakova & Charles R. Taylor, 2021. "Space between products on display: the impact of interspace on consumer estimation of product size," Journal of the Academy of Marketing Science, Springer, vol. 49(6), pages 1109-1131, November.
    25. Schaal, Kai & Hübner, Alexander, 2018. "When does cross-space elasticity matter in shelf-space planning? A decision analytics approach," Omega, Elsevier, vol. 80(C), pages 135-152.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hasmukh Gajjar & Gajendra Adil, 2010. "A piecewise linearization for retail shelf space allocation problem and a local search heuristic," Annals of Operations Research, Springer, vol. 179(1), pages 149-167, September.
    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. Irion, Jens & Lu, Jye-Chyi & Al-Khayyal, Faiz & Tsao, Yu-Chung, 2012. "A piecewise linearization framework for retail shelf space management models," European Journal of Operational Research, Elsevier, vol. 222(1), pages 122-136.
    4. Robert Russell & Timothy Urban, 2010. "The location and allocation of products and product families on retail shelves," Annals of Operations Research, Springer, vol. 179(1), pages 131-147, September.
    5. Gecili, Hakan & Parikh, Pratik J., 2022. "Joint shelf design and shelf space allocation problem for retailers," Omega, Elsevier, vol. 111(C).
    6. Hübner, Alexander & Schaal, Kai, 2017. "A shelf-space optimization model when demand is stochastic and space-elastic," Omega, Elsevier, vol. 68(C), pages 139-154.
    7. Kim, Gwang & Moon, Ilkyeong, 2021. "Integrated planning for product selection, shelf-space allocation, and replenishment decision with elasticity and positioning effects," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).
    8. J Irion & J-C Lu & F A Al-Khayyal & Y-C Tsao, 2011. "A hierarchical decomposition approach to retail shelf space management and assortment decisions," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(10), pages 1861-1870, October.
    9. 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.
    10. Murray, Chase C. & Talukdar, Debabrata & Gosavi, Abhijit, 2010. "Joint Optimization of Product Price, Display Orientation and Shelf-Space Allocation in Retail Category Management," Journal of Retailing, Elsevier, vol. 86(2), pages 125-136.
    11. Bianchi-Aguiar, Teresa & Silva, Elsa & Guimarães, Luis & Carravilla, Maria Antónia & Oliveira, José F., 2018. "Allocating products on shelves under merchandising rules: Multi-level product families with display directions," Omega, Elsevier, vol. 76(C), pages 47-62.
    12. Flamand, Tulay & Ghoniem, Ahmed & Haouari, Mohamed & Maddah, Bacel, 2018. "Integrated assortment planning and store-wide shelf space allocation: An optimization-based approach," Omega, Elsevier, vol. 81(C), pages 134-149.
    13. 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.
    14. Amrouche, Nawel & Zaccour, Georges, 2007. "Shelf-space allocation of national and private brands," European Journal of Operational Research, Elsevier, vol. 180(2), pages 648-663, July.
    15. Zhao, Ju & Zhou, Yong-Wu & Wahab, M.I.M., 2016. "Joint optimization models for shelf display and inventory control considering the impact of spatial relationship on demand," European Journal of Operational Research, Elsevier, vol. 255(3), pages 797-808.
    16. Erjen van Nierop & Dennis Fok & Philip Hans Franses, 2008. "Interaction Between Shelf Layout and Marketing Effectiveness and Its Impact on Optimizing Shelf Arrangements," Marketing Science, INFORMS, vol. 27(6), pages 1065-1082, 11-12.
    17. Leng, Mingming & Parlar, Mahmut & Zhang, Dengfeng, 2014. "Cooperative game analysis of retail space-exchange problems," European Journal of Operational Research, Elsevier, vol. 232(2), pages 393-404.
    18. Kiani, Gholam Hossain, 2020. "Determining profitable products in the retail market with consideration of cash limitation and exhibition periods," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    19. Stelios Tsafarakis & Charalampos Saridakis & Nikolaos Matsatsinis & George Baltas, 2016. "Private labels and retail assortment planning: a differential evolution approach," Annals of Operations Research, Springer, vol. 247(2), pages 677-692, December.
    20. Yan-Kwang Chen & Shi-Xin Weng & Tsai-Pei Liu, 2020. "Teaching–Learning Based Optimization (TLBO) with Variable Neighborhood Search to Retail Shelf-Space Allocation," Mathematics, MDPI, vol. 8(8), pages 1-16, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jouret:v:86:y:2010:i:1:p:94-105. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-retailing .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.