Retail shelf management forms the part of the supply chain that interfaces between the ultimate customer need and the rest of the supply chain.
• Matching consumer demand with supply is the core task of retailers and a key lever for increasing efficiency.
• Consumers demand high product availability at low prices, while retailers are ever expanding their product variety.
• The product proliferation is constrained by the limited store space and requires therefore an efficient decision making by the retailers about which products to offer and how to allocate the scare resource of shelf space.
• Assortment and shelf space optimization is one of the most important and difficult decisions that retailer managers have to face, as it needs to reflect consumer behaviour such as substitutions, product recognition, or price sensitivity, as well as inventory, replenishment,
and operational costs.