Optimal workforce size and allocation for urban retail chains

An area supervisor managing an area chain of local urban retail stores faces the problem of determining the number of employees and allocating them to retail stores (workforce size and its allocation). We propose a model to maximize the overall expected profit rate of a coordinated area chain where employee absenteeism is uncertain. Retail stores operate as a Markovian loss queueing system. An efficient algorithm is proposed to optimize both workforce size and its allocation. We also provide insights for retail chain managers by comparing the optimal overall expected profit rates and the optimal workforce sizes of a coordinated area chain with those of its uncoordinated counterpart. 2005 Elsevier B.V. All rights reserved.