Assortment planning is a strategic approach to maintaining the right level of inventory for each product in a retail store. The general goal is to meet near-term demand while avoiding carrying excess products. Floor space and merchandise display strategies are also factors in assortment planning.
Many retailers use advanced software programs to facilitate assortment planning. Software models allow for more precise allocations of inventory to each store. Rather than allocating the same amount of goods to each store in the retail chain, companies can respond to variations in local market demand for each product. Software programs also help track changes in demand over time.