Planning Product Assortment Using Portfolio Optimization

Charles Trappey, A.J.C. Trappey, R. Feinberg

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

The task of planning product assortments using portfolio optimization is developed and applied to a case in apparel manufacturing and distribution. The planning process begins with the retail buyer, the key individual in the organization that selects merchandise for resale to the consumer. In order to maximize the profit and minimize the risk of the merchandise investment, the retail buyer must simultaneously consider many different factors that impact the merchandise mix decision. A merchandise planning model is developed for the retail buyer based on the concept of stock portfolio theory. The investment returns and risks are considered to determine the product assortment. A retrospective statistical test is conducted to verify the goodness of the product assortment portfolio model. The methodology, developed for a large Midwest retailer, can be extended to a wide variety of cases in manufacturing, especially cases involving the production of consumer products.
Original languageEnglish
Title of host publicationOperations Research in Production Planning and Control
PublisherSpringer Berlin Heidelberg
Pages3-20
Number of pages18
ISBN (Electronic)9783642780639
ISBN (Print)9783642780653
DOIs
StatePublished - 25 Jun 1992
EventJoint German/US Conference - Hagen, Germany
Duration: 25 Jun 199226 Jun 1992

Conference

ConferenceJoint German/US Conference
CountryGermany
CityHagen
Period25/06/9226/06/92

Keywords

  • Merchandise assortment planning
  • portfolio theory
  • product life cycle

Fingerprint Dive into the research topics of 'Planning Product Assortment Using Portfolio Optimization'. Together they form a unique fingerprint.

Cite this