Browsing by Subject "Assortment Planning"

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Open Access
Assortment planning with premium services
(2018-09) Akçakuş, Emine İrem
We consider the assortment planning problem of an online retailer who offers products with multiple service types which differ in delivery time. We assume that customers make their choices according to the multinomial logit model. Our objective is to find the assortment of each service type which maximizes the expected revenue. Service types with faster delivery time are stored in fulfillment centers closer to the customers. The retailer gains less profit from the products offered with faster delivery due to the higher storage and transportation costs; however, faster delivery increases the popularity of the products. Therefore, delivering products faster has a trade off between higher demand and lower revenue. We provide a linear program to solve this problem. We also find structural properties of the optimal assortment and construct a polynomial time algorithm based on the structure of the optimal solution, along with an alternative method developed by modifying an existing algorithm. We also study another version of the problem where the retailer incurs a fixed cost for including a product in the assortment. We analyze the complexity of the problem for two structures of fixed cost. In the first one, the fixed cost is the same for all products. In this case, we show that the problem can be solved in polynomial time. In the second one, the fixed cost is different for all products and the problem is NP-complete. Finally, we conducted a numerical study in which we analyzed the effects of the problem parameters on the optimal assortment.
Open Access
Optimal assortment planning under capacity constraint : single and multi-firm systems using transshipments
(2016-08) Cephe, Ecem
To survive in today's competitive market, firms need to meet customer expectations by offering high quality products with high variety. However, there might be some physical and financial constraints limiting the assortment size. The process of finding the optimal product assortment by considering both the benefits of a large assortment as well as the costs and limits of it is known as assortment planning. In this thesis, assortment planning is analyzed under predetermined assortment capacity limits for two cases. First, a single firm's optimal assortment problem is studied to maximize its profits. Second, assortment planning problem of a system of multiple firms is investigated jointly, where firms are interacting through product sharing, called transshipments. Transshipments are known to increase product availability, thus decreasing stock-outs. Transshipments have been always utilized as an emergency demand satisfaction action in support of inventory management in the literature. Differently, in this study, transshipments are evaluated in advance of inventory management while making the assortment planning of firms. In both problems, demand is defined to have an exogenous model, where each customer has a predetermined preference for each product from the potential set. Proportional demand substitutions are also allowed from an out of assortment product to others. The results on the optimal assortment of a single firm are used as a benchmark to the optimal assortments of multiple firms communicating through transshipments. By relying on proven optimality results, it is shown how easily optimal assortments can be obtained compared to a full enumeration. Extensive numerical analyses are reported on the performances of the heuristic algorithm and sensitivity of optimal assortments to system parameters.