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Using Analytics to Enhance a Food Retailer’s Shelf-Space Management

Author

Listed:
  • Teresa Bianchi-Aguiar

    (INESC TEC and Faculty of Engineering, University of Porto, 4200-465 Porto, Portugal)

  • Elsa Silva

    (INESC TEC and Faculty of Engineering, University of Porto, 4200-465 Porto, Portugal)

  • Luis Guimarães

    (INESC TEC and Faculty of Engineering, University of Porto, 4200-465 Porto, Portugal)

  • Maria Antónia Carravilla

    (INESC TEC and Faculty of Engineering, University of Porto, 4200-465 Porto, Portugal)

  • José F. Oliveira

    (INESC TEC and Faculty of Engineering, University of Porto, 4200-465 Porto, Portugal)

  • João Günther Amaral

    (Sonae MC, 4471-909 Maia, Portugal)

  • Jorge Liz

    (Sonae MC, 4471-909 Maia, Portugal)

  • Sérgio Lapela

    (Sonae MC, 4471-909 Maia, Portugal)

Abstract

This paper describes the results of our collaboration with the leading Portuguese food retailer to address the shelf-space planning problem of allocating products to shop-floor shelves. Our challenge was to introduce analytical methods into the shelf-space planning process to improve the return on space and automate a process heavily dependent on the experience of the retailer’s space managers. This led to the creation of GAP, a decision support system that the company’s space-management team uses daily. We developed a modular operations research approach that systematically applies mathematical programming models and heuristics to determine the best layout of products on the shelves. GAP combines its analytical strength with an ability to incorporate different types of merchandising rules to balance the tradeoff between optimization and customization.

Suggested Citation

  • Teresa Bianchi-Aguiar & Elsa Silva & Luis Guimarães & Maria Antónia Carravilla & José F. Oliveira & João Günther Amaral & Jorge Liz & Sérgio Lapela, 2016. "Using Analytics to Enhance a Food Retailer’s Shelf-Space Management," Interfaces, INFORMS, vol. 46(5), pages 424-444, October.
    • Handle: RePEc:inm:orinte:v:46:y:2016:i:5:p:424-444
    DOI: 10.1287/inte.2016.0859
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. Marcel Corstjens & Peter Doyle, 1981. "A Model for Optimizing Retail Space Allocations," Management Science, INFORMS, vol. 27(7), pages 822-833, July.
    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. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. 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.
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    6. Abdelaziz, Fouad Ben & Maddah, Bacel & Flamand, Tülay & Azar, Jimmy, 2024. "Store-Wide space planning balancing impulse and convenience," European Journal of Operational Research, Elsevier, vol. 312(1), pages 211-226.
    7. Ostermeier, Manuel & Düsterhöft, Tobias & Hübner, Alexander, 2021. "A model and solution approach for store-wide shelf space allocation," Omega, Elsevier, vol. 102(C).

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