A decision support system for strategic planning in large-scale marketing channels: An example in the tile industry

This paper presents a decision support system for strategic planning in marketing channels. A dynamic model of the marketing channel is employed which comprises manufacturer and retailer levels. Decision making is achieved through a game theoretical inference mechanism in which each player (manufacturer/retailer) optimises for a long-term profit maximisation objective. Both historical data and managerial expertise are used for the parameterisation of the system's knowledge base. The decision support system provides a forecast of profit and sales and computes pricing and shelf space allocation strategies that maximise long-term profit. It offers facilities such as the study of coalitions, long-term decision-making in all phases of a product's life cycle, the impact of pricing, allocation strategies, production expansion, cost regulation, and others. The operationality of the system is illustrated in decision-making situations in the tile industry.