Simulated Annealing Hyper-Heuristic for a Shelf Space Allocation on Symmetrical Planograms Problem

Abstract

The allocation of products on shelves is an important issue from the point of view of effective decision making by retailers. In this paper, we investigate a practical shelf space allocation model which takes into account the number of facings, capping, and nesting of a product. We divide the shelf into the segments of variable size in which the products of the specific types could be placed. The interconnections between products are modelled with the help of categorizing the products into specific types as well as grouping some of them into clusters. This results in four groups of constraints—shelf constraints, shelf type constraints, product constraints, position allocation constraints—that are used in the model for aesthetic symmetry of a planogram. We propose a simulated annealing algorithm with improvement and reallocation procedures to solve the planogram profit maximization problem. Experiments are based on artificial data sets that have been generated according to real-world conditions. The efficiency of the designed algorithm has been estimated using the CPLEX solver. The computational tests demonstrate that the proposed algorithm gives valuable results in an acceptable time.

Keywords

• retailing decisions
• shelf space allocation
• simulated annealing
• heuristics
• merchandising