Retail replenishment models with display-space elastic demand

Harish Abbott, Udatta S. Palekar

Research output: Contribution to journalArticlepeer-review


We study a single store multi-product inventory problem in which product sales are a composite function of shelf space. Since sales tend to deplete the amount of product on display, the effective shelf space assigned to the product diminishes with time unless replenishment occurs. We consider the problem of optimal replenishment times under these conditions. We assume a linear dependence of sales rate to effective shelf space in all our analysis. We present exact and approximate solutions for the single product and multi-product cases. For the single product case, we study the effect of space elasticity, cross elasticity and empty space elasticity on the optimal replenishment period. For the multi-product case we present a computationally attractive method using matrix exponentials and develop error bounds for this method.

Original languageEnglish (US)
Pages (from-to)586-607
Number of pages22
JournalEuropean Journal of Operational Research
Issue number2
StatePublished - Apr 16 2008


  • Demand elasticity
  • Inventory management
  • Replenishment planning

ASJC Scopus subject areas

  • Computer Science(all)
  • Modeling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management


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