Glossary ยท approach
Shelf-Space Allocation
Deciding how much shelf room (how many facings) each listed product gets, balancing demand and margin against space.
Shelf-Space Allocation ProblemSSAPPlanogram Optimization
Shelf-space allocation decides the number of facings (front-of-shelf units) each listed product receives. Demand depends on space (space elasticity โ more space, more visibility, more sales), typically a concave (diminishing-returns) function. The classical formulation is Corstjens and Doyle (1981); modern approaches use MIP or bilinear programming to jointly model cross-elasticity and substitution. The output is a planogram: which shelf, which height, which product, how many facings. Merchandising principles like 'eye-level' and category-flow (decision tree) are also entered as constraints. Joint Assortment + Shelf-Space formulations have become common since the 2010s.
รrnek
A supermarket distributes 200 facings across 50 SKUs in the snacks category; the SSAP solution gives 80 facings to the top-10 SKUs while keeping 2-3 facings minimum for niche brands to preserve category liveliness.