A Demand Estimation Procedure for Retail Assortment Optimization with Results from Implementations

Abstract

We consider the problem of choosing, from a set of N potential SKUs in a retail category, K SKUs to be carried at each store so as to maximize revenue or profit. Assortments can vary by store, subject to a maximum number of different assortments. We introduce a model of substitution behavior, in case a customer’s first choice is unavailable and consider the… (More)
DOI: 10.1287/mnsc.2014.1904

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