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A Mathematical Model for Simultaneously Determining the Optimal Brand-Collection and Display-Area Allocation

Author

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  • Evan E. Anderson

    (Tulane University, New Orleans, Louisiana)

  • Henry N. Amato

    (Loyola University, New Orleans, Louisiana)

Abstract

This paper addresses a fundamental short-run resource-allocation problem confronting retail distribution: simultaneously finding the specific brands, from many, that should be displayed, and the amount of retail product-display area that should be assigned to these brands, in order to maximize the retail institution's profit. The paper decomposes total market demand according to the various levels of brand preference that could conceivably exist in final markets, and then, employs an algorithm, similar to the one used to solve the fixed-charge problem, to find the optimal brand mix and display-area allocation.

Suggested Citation

  • 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.
    • Handle: RePEc:inm:oropre:v:22:y:1974:i:1:p:13-21
    DOI: 10.1287/opre.22.1.13
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    Cited by:

    1. 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.
    2. 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.
    3. Abbott, Harish & Palekar, Udatta S., 2008. "Retail replenishment models with display-space elastic demand," European Journal of Operational Research, Elsevier, vol. 186(2), pages 586-607, April.
    4. Reisi, Mohsen & Gabriel, Steven A. & Fahimnia, Behnam, 2019. "Supply chain competition on shelf space and pricing for soft drinks: A bilevel optimization approach," International Journal of Production Economics, Elsevier, vol. 211(C), pages 237-250.
    5. Kuo, Chia-Wei & Yang, Shu-Jung Sunny, 2013. "The role of store brand positioning for appropriating supply chain profit under shelf space allocation," European Journal of Operational Research, Elsevier, vol. 231(1), pages 88-97.
    6. 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.
    7. 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.
    8. 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.
    9. Piramuthu, Selwyn & Zhou, Wei, 2013. "RFID and perishable inventory management with shelf-space and freshness dependent demand," International Journal of Production Economics, Elsevier, vol. 144(2), pages 635-640.
    10. 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.
    11. Xiaoning Luo & Yanmin Jiang & Qiying Hu, 2010. "Supply chain coordination with shelf‐space and retail price dependent demand and heterogeneous retailers," Naval Research Logistics (NRL), John Wiley & Sons, vol. 57(8), pages 673-685, December.
    12. 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.
    13. Ge, Jiwen & Honhon, Dorothee & Fransoo, Jan C. & Zhao, Lei, 2020. "Manufacturer competition in the nanostore retail channel," European Journal of Operational Research, Elsevier, vol. 286(1), pages 360-374.
    14. 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.
    15. 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.
    16. 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).
    17. Yang, Ming-Hsien, 2001. "An efficient algorithm to allocate shelf space," European Journal of Operational Research, Elsevier, vol. 131(1), pages 107-118, May.
    18. 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.
    19. Ketzenberg, Michael & Metters, Richard & Vargas, Vicente, 2002. "Quantifying the benefits of breaking bulk in retail operations," International Journal of Production Economics, Elsevier, vol. 80(3), pages 249-263, December.
    20. 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.
    21. Arvind Shroff & Bhavin J. Shah & Hasmukh Gajjar, 2021. "Shelf space allocation game with private brands: a profit-sharing perspective," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(2), pages 116-133, April.

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