An inventory-theoretic approach to product assortment and shelf-space allocation

Abstract

The purpose of this research is to generalize and integrate existing inventory-control models, product assortment models, and shelf-space allocation models. We first generalize the inventory-level-dependent demand inventory model to explicity model the demand rate as a function of the displayed inventory level. We then investigate the product assortment and shelf-space allocation problems by extending this model into the multi-item, constrained environment. A greedy heuristic and a genetic algorithm are proposed for the solution to the integrated problem.