Norm Borin is Associate Professor of Marketing at California Polytechnic State University in San Luis Obispo, California. He received his Ph.D. from the University of Virginia, his M.B.A. from the California State University, Sacramento, and a B.S. from the University of California, Davis. His current research interests include channel management with a focus on shelf management models and category management. His papers have been published in the Journal of Retailing, Journal of Direct Marketing, and the Journal of Education for Business. He is a member of AMA, TIMS, and AAA.
A Model for Determining Retail Product Category Assortment and Shelf Space Allocation
Article first published online: 7 JUN 2007
Volume 25, Issue 3, pages 359–384, May 1994
How to Cite
Borin, N., Farris, P. W. and Freeland, J. R. (1994), A Model for Determining Retail Product Category Assortment and Shelf Space Allocation. Decision Sciences, 25: 359–384. doi: 10.1111/j.1540-5915.1994.tb00809.x
- Issue published online: 7 JUN 2007
- Article first published online: 7 JUN 2007
- Received: January 28, 1993. Accepted: May 16, 1994.
- Marketing Management;
- Resource Allocation;
We develop a category management model to aid retailers in the space constrained decisions of which products to stock (assortment) and how much shelf space to allocate to those products. The model is formulated as a constrained optimization problem with two basic decision variables: assortment and allocation of space to the items in the assortment. The non-linearities in the objective function and the zero-one decision variables disallow a closed form solution. We develop a heuristic solution procedure based on simulated annealing and test it on a problem with a known optimum. We also apply the technique to a larger problem without a known optimum. Finally, the solution found by simulated annealing is compared against a solution produced using a shelf allocation rule based on share of sales.