An efficient algorithm for capacitated assortment planning with stochastic demand and substitution

The ever increasing product variety in grocery retailing is in conflict with the limited shelf space. Managing the assortment and regular order quantity for perishable and non-perishable products is therefore a core task for retailers. Retailers want to maximize profit by considering potential revenues, purchase costs, diminishing profits for products and opportunity costs for unfulfilled demand when determining assortment sizes and order volume to meet stochastic consumer demand.

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