A SYSTEMATIC LITERATURE REVIEW ON STOCHASTIC PROGRAMMING MODELS IN THE RETAIL INDUSTRY

Abstract

Optimisation under uncertainty, also referred to as stochastic optimisation, originated during the 1950s. This research field was later extended into prominent application areas, including finance, energy, and production planning. During the 1970s, stochastic programming was first applied in the marketing industry. Interest in this field grew exponentially during the early 2000s, and was identified as one of the most promising future research fields for optimisation. Stochastic programming is an asset for the following world researchers due to its uncertainty calculation. This paper aims to identify and evaluate all existing stochastic programming models in the literature in the retail industry. First, a historical overview of marketing models is provided, with a specific focus on stochastic optimisation. Second, all stochastic programming model applications in the retail industry are identified by conducting a systematic literature review. Last, potential gaps for future research opportunities are identified to help retailers to improve their marketing strategies.