Assortment Plan

Assortment planning is a process whereby products are selected and planned to maximize sales and profit for a specified period of time. The assortment plan considers the financial objectives and seasonality of merchandise to ensure proper receipt flow. Outputs of assortment planning include initial purchase quantities and the receipt flow across time that will inform the allocation process. The level of detail in the assortment planning process will differ depending on the type of product being planned. It requires a trade-off between three elements, that is, how many different categories does the retailer carry (called a retailer?s breadth), how many SKUs do they carry in each category (called depth), and how much inventory do they stock of each SKU, which obviously affects their in-stock rate.