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Friday, May 06, 2011

New Science of Retailing: Assortment Planning

Today at UC,  Heard Marshall Fisher talk about work in chapter 2 of his book: The New Science of Retailing: How Analytics are Transforming the Supply Chain and Improving Performance which covers assortment planning.

In the book he covers such diverse product assortments as snack cakes and tire sales.   He positions the  technique as using modeling, estimation and optimization. And of course data gathering.  I would emphasize that there is much of that to do in any analytics project, making sure that the data is clean and gathered under similar the same environmental context.  He also covers what kinds of problems can be solved using this approach.  The optimization he uses is a simple greedy algorithm, implemented by sorting.  In the case of the tire sales, the approach yielded a 6 percent revenue increase.  Impressive results for a relatively simple approach. 

He positions this as Mining Sales Data to Discover 'Home Run'  Products You are Missing.

Overall I found this book to be an excellent outline-style introduction to the use of analytics in the supply chain.

I have heard Marshall Fisher talk several times and have been impressed by the well positioned and yet practical analytics approaches he demonstrates. Worth taking a further look at. See also his Wharton site.

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