A two-stage stochastic programming model for assortment optimisation

Khaled N. Alqahtani, Nazrul I Shaikh

Research output: Contribution to journalArticle

Abstract

This paper presents a two-stage stochastic programming model for retail assortment optimisation. Decisions related to what products to stock and in what quantity are taken in the first stage while decisions related to what products to use to satisfy the primary versus the secondary demand are taken in the second stage. Such a model is very useful for online retailers and catalogue merchants who witness a gap between an order arrival and fulfilment. A case study illustrating the modelling approach and its benefits as compared to other existing assortment optimisation techniques is also presented.

Original languageEnglish (US)
Pages (from-to)185-209
Number of pages25
JournalInternational Journal of Applied Management Science
Volume11
Issue number3
DOIs
StatePublished - Jan 1 2019

Keywords

  • Assortment planning
  • Demand substitution
  • Retail
  • Stochastic programming
  • Two-stage models

ASJC Scopus subject areas

  • Strategy and Management

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