A Literature Review on Demand Models in Retail Assortment Planning

A retailer assortment is defined as the mix of products carried by a retail store. Assortment planning (AP) is a process of selecting types and number of product to be kept from a given product line and also to determine the optimal level of inventory of these products. The assortment optimization problem in the literature varies because of the type of demand models considered by the authors or because of the context of the problem considered. Various authors have developed models in past that cater to various objectives associated with shelf-space allocation and assortment decisions. It has been observed that the demand estimation in any assortment planning problem mostly considered shelf-space and substitution parameters. In the current work, the assortment planning problem dealt by various researchers primarily with shelf-space and substitution effect consideration will be reviewed.