  We present the Integrated Size and Price Optimization Problem (ISPO) for a
fashion discounter with many branches. Based on a two-stage stochastic
programming model with recourse, we develop an exact algorithm and a
production-compliant heuristic that produces small optimality gaps. In a field
study we show that a distribution of supply over branches and sizes based on
ISPO solutions is significantly better than a one-stage optimization of the
distribution ignoring the possibility of optimal pricing.
