Khosro Pichka

Assortment Optimization at Walmart: Business Requirements and Optimization Challenges

Assortment optimization problem entails both selecting the set of products to be carried in stores and setting quantity levels for each product (e.g., number of facings). For each category at Walmart, there might be thousands of different items (SKUs), that because of different considerations like limited space, we cannot carry all the items to sell. We must choose a subset of available items that satisfies the retailer’s inter- and intra-store strategies. This problem can be solved at any level that the merchants want to enforce the assortment for like store level or planogram level (i.e., cluster of stores). We designed and implemented a new optimization model that solves the assortment problem for Walmart.