Retail category planning for perishable products with out-of-assortment substitution effects

Abstract

Managing retail assortment, shelf space and inventory is a core decision in retail, as increasing product variety is in conflict with the limited shelf space. A retailer needs to define assortment size, assign shelf space and define reorder volume which then meets stochastic consumer demand. Our goal is to describe the underlying category planning problem and develop a Newsboy-based decision model. This paper describes a capacitated multi-product assortment, shelf space and inventory management problem under stochastic demand and substitution effects. Our numerical examples show that substitution effects have a significant impact on total profit and solution structure.

About the Presenter

Alexander H. Hübner is Juniorprofessor for Operations Management at the Catholic University of Eichstaett-Ingolstadt, Germany. Before that, he was a Project Manager with McKinsey&Company in Munich serving manily retail and consumer goods clients. He holds a Ph.D. (2011) and a Diploma in Business Administration from the Catholic University of Eichstaett-Ingolstadt. His research was funded by the German Ministry of Research and by the German Academic Exchange Service. His research interests focus on service operations management. He develops decision support systems in demand and supply chain management, shelf space management, assortment planning in the retail and consumer goods industry as well as analyses in retail multi-channel logistics and operational processes in hospitals.

About the Seminar

The KLU research seminar series is a regular meeting of PhD students, Post-Docs and professors who conduct research in the field of logistics and supply chain management. The research seminar is open to the public and we happily welcome guests.