Case-oriented Paper
Journal of the Operational Research Society advance online publication 8 October 2008; doi: 10.1057/jors.2008.98
Heuristic and meta-heuristic approaches for multi-period shelf-space optimization: the case of motion picture retailing
S Raut1, S Swami2 and M P Moholkar3
- 1Tata Consultancy Services Limited, Mumbai, India
- 2DEI (Deemed University), Dayalbagh, Agra, India
- 3GAD Group, IBM Global Services, India
Correspondence: S Swami, Department of Management, Faculty of Social Sciences, DEI (Deemed University), Dayalbagh, Agra, UP 282005, India. E-mail: sswami1853@gmail.com
Received November 2006; Accepted June 2008; Published online 8 October 2008.
Abstract
The retail industry is in a highly competitive situation currently. The success of the industry depends upon the efficient allocation of products in the shelf space. Several previous authors have developed mathematical models for optimal shelf-space allocation. We extend the prior research in the direction of the multi-period problem and introduce more realistic characteristics, such as product demand perishability, pricing contract and cross-elasticity. The new characteristics help us address the case of the real-life movie allocation problem in multiplexes. We formulate a linear integer programming model to represent the problem. The proposed model shows a potential benefit of at least 11% increase in revenue for a multiplex theatre situation as compared to the existing methods. We also propose two greedy heuristics and a genetic algorithm to solve the same problem. A computational study shows that the genetic algorithm performs better than the existing method.
Keywords:
shelf-space model, demand perishability, contract terms, genetic algorithm, multiplex
