Resource reallocation strategies for sustainable efficiency improvement of retail chains

Sustainability is an important agenda for retail businesses in the present times. To create long-term value for customers, retail businesses are required to adopt approaches that can enable them to integrate operational efficiency with concerns for environmental and social sustainability. Optimal deployment of resources among the several stores run by a retail chain, with an objective of maximizing sustainable efficiency, is an enabling step in this direction. This research finds three main contributions to the body of knowledge: (1) resource reallocation models are proposed based on data envelopment analysis (DEA), integrating sustainability in the efficiency measurement model and aiming for improvement in the aggregated efficiency, (2) the proposed models integrate selective centralized and decentralized reallocation decisions according to the input-output characteristics, and (3) different scenarios are explored depending on whether the total resources are to be kept the same or reduced through reallocations according to the management's objectives. The application of the proposed models is illustrated with the case study of a supermarket retail chain.

Automated summary

Sustainability is key for retail businesses, who must integrate operational efficiency with environmental and social concerns for long-term customer value. This research proposes resource reallocation models based on data envelopment analysis (DEA) to improve aggregated efficiency with sustainability in mind. The models integrate centralized and decentralized reallocation decisions based on input-output characteristics, and explore different scenarios depending on management objectives. The application of these models is demonstrated through a case study of a supermarket retail chain.