Heuristics for shelf space allocation problem with vertical and horizontal product categorization

Abstract

In this research, we proposed a practical shelf space allocation model with the vertical and horizontal categorization of products. Five groups of constraints, such as shelf, product, multi-shelves, orientation and band constraints, are implemented in the model. We proposed two heuristics to solve the retailer's profit maximization problem. The experiments were performed on small instances, and the solution was compared to the optimal solution found by the CPLEX solver. The experiments proved that heuristics could find the optimal solution in most cases (14/20 for heuristics H1 and 16/20 for heuristics H2) without checking the whole solutions space. The lowest solution quality is 97.68% which shows that the heuristics allow finding high-quality near-optimal solutions. Therefore the steps implemented in the proposed heuristics should be used in more complicated shelf space allocation problems for which it is impossible to find a solution by the solvers.