Product assignment using quadratic assignment model in retail

Abstract

This paper studies the problem of product assignment in retail. It solves the problem of assigning various products to various in-store locations so that there is increased sale as well as a better customer convenience. Retail managers often work out of intuition to place various products at various locations inside the retail store. While doing so, it is often seen that retail managers ignore the phenomenon of cross-selling. This study quantifies this problem and formulates it as a quadratic assignment problem which is solved by implementing a genetic algorithm. The resulting solution maximises cross-selling among products and at the same time improves customer convenience making it a win-win situation for everybody.