Sequence Matters: Shelf‐Space Allocation under Dynamic Customer‐Driven Substitution

Customers who face a stockout situation often decide to purchase a different product in the same category. We analyze the resulting dynamic substitution problem in a retail environment, where customers serve themselves from the store shelves, such that the sequence of customer arrivals affects how scarce products are allocated to customers. We consider a setting with constrained shelf space, and we study how a retailer should optimally allocate such space between substitute products. We characterize environments where the sequence of customer arrivals can have a substantial impact on profitability.

• 저널Production and Operations Management · 22(4) · 875–887
• 토픽Supply Chain and Inventory Management · Management Information Systems
• DOI10.1111/j.1937-5956.2012.01389.x
• 저자Wendell Gilland, H. Sebastian Heese