Product selection and space allocation in supermarkets

A model and an algorithm are proposed for the simultaneous optimal selection among a given set of products of the assortment of products to be sold in a supermarket and the allocation of shelf space to these products. The model takes into account the space elasticity of the sales as well as the constraints that any chosen product must receive a minimum shelf space and that the shelf space allocated to each product must be equal to an integer number of facings.Computational results are presented, including a comparison with the results given by several rules for space allocation currently used. Some marketing implications are discussed.