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A weighted goal programming approach for replenishment planning and space allocation in a supermarket

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  • M M Lotfi

    (University of Tehran)

  • M Rabbani

    (University of Tehran)

  • S F Ghaderi

    (University of Tehran)

Abstract

We propose a mixed integer non-linear goal programming model for replenishment planning and space allocation in a supermarket in which some constraints on budget, space, holding times of perishable items, and number of replenishments are considered and weighted deviations from two conflicting objectives, namely profitability and customer service level, are minimized. We apply a minimum–maximum approach to introduce demand where the maximum demand is a function of price change and allocated space. Each item is presented in the form of multiple brands, probably exposed to price changes, competing to obtain more space. In addition to inventory investment costs, replenishment costs, and inventory holding costs we also include costs related to non-productive use of space. The order quantity, the amount of allocated showroom and backroom spaces, and the cycle time of joint replenishments are key decision variables. We also propose an extended model in which price is a decision variable. Finally we solve the model using LINGO software and provide computational results.

Suggested Citation

  • M M Lotfi & M Rabbani & S F Ghaderi, 2011. "A weighted goal programming approach for replenishment planning and space allocation in a supermarket," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(6), pages 1128-1137, June.
    • Handle: RePEc:pal:jorsoc:v:62:y:2011:i:6:d:10.1057_jors.2010.52
    DOI: 10.1057/jors.2010.52
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    References listed on IDEAS

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    1. Reyes, Pedro M. & Frazier, Gregory V., 2007. "Goal programming model for grocery shelf space allocation," European Journal of Operational Research, Elsevier, vol. 181(2), pages 634-644, September.
    2. 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.
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    Cited by:

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