Merchandising Analytics

Assortment and Allocation Planning

We assist retailers of short lifecycle products (apparel, electronics, games, DVDs, etc) in deciding what items to stock (assortment) in each store and how many units of each item (allocation) to stock in and ship to each store.

Our unique methodology adjusts sales data for stock-outs and markdowns, to develop a detailed understanding of 'true demand'.

Our assortment optimization methodology computes the optimal assortment breadth for each store segment and product group based on metrics such as 'true demand per item'. This allows us to prescribe optimal breadth in each product segment for each store for each planning cycle based on constraints such as minimum/ maximum SKUs to be carried.

We classify the stores into Volume Groups based on 'True demand' levels in each product group and planning cycle in each store.

The optimal allocation calculations factor in the minimum lot size or shipment size for each item.

Once the optimal assortment breadth and allocation for each store for each planning cycle is decided, we work with the client's planning and allocation team to finalize which items and what quantities need to be shipped to each store.

Methodology for Retail Assortment & Allocation Optimization
Methodology for Retail Assortment & Allocation Optimization

We also conduct size mix optimization studies for fashion retail clients that want to optimize the size mix of various items – based on true demand patterns and packing/ transportation considerations.

Cumulative True Demand Curves
Cumulative True Demand Curves

For more information on our assortment and allocation solution, read this whitepaper, or email us at