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Assortment optimization

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Full-Text Articles in Other Economics

Retail Assortment Planning In The Presence Of Consumer Search, Gerard. P. Cachon, Christian Terwiesch, Yi Xu Jan 2005

Retail Assortment Planning In The Presence Of Consumer Search, Gerard. P. Cachon, Christian Terwiesch, Yi Xu

Operations, Information and Decisions Papers

Consumers often know what kind of product they wish to purchase, but do not know which specific variant best fits their needs. As a result, a consumer may find an acceptable product in one retailer but nevertheless purchase nothing, opting to search other retailers for an even better product. We study several models of retail assortment planning, some of which explicitly account for consumer search and one that does not, which we call the “no-search” model. Even though the no-search model never includes an unprofitable variant in the assortment, in the presence of consumer search, it may indeed be optimal ...