A Heuristic Approach for Shelf Space Allocation Problem

Abstract

A shelf space allocation problem (SSAP) is a special form of multi constraint knapsack problem. The main difference between knapsack problem and SSAP is that a knapsack problem has only capacity constraints. Commercial space management systems use many different heuristic approaches for allocating shelf space due to NP-hard complexity of the SSAP. These heuristics are usually based on simple intuitive rules that could be easily used in practice to implement shelf space allocation decisions. In this paper, a new heuristic is developed to obtain good allocation of shelf space for different products in order to increase profitability under different constraints such as limited shelf space and elasticity factors.