A branch-and-cut algorithm for the latent-class logit assortment problem

被引:63
作者
Mendez-Diaz, Isabel [1 ]
Jose Miranda-Bront, Juan [1 ]
Vulcano, Gustavo [2 ]
Zabala, Paula [1 ,3 ]
机构
[1] Univ Buenos Aires, Dept Computac, FCEyN, RA-1053 Buenos Aires, DF, Argentina
[2] NYU, Leonard N Stern Sch Business, New York, NY USA
[3] Consejo Nacl Invest Cient & Tecn, Buenos Aires, DF, Argentina
关键词
Retail operations; Revenue management; Choice behavior; Multinomial logit; Integer programming; Fractional programming; DYNAMIC ASSORTMENT; RETAIL ASSORTMENTS; MODELS;
D O I
10.1016/j.dam.2012.03.003
中图分类号
O29 [应用数学];
学科分类号
070104 ;
摘要
We study the product assortment problem of a retail operation that faces a stream of customers who are heterogeneous with respect to preferences. Each customer belongs to a market segment characterized by a consideration set that includes the alternatives viewed as options, and by the preference weights that the segment assigns to each of those alternatives. Upon arrival, he checks the offer set displayed by the firm, and either chooses one of those products or quits without purchasing according to a multinomial-logit (MNL) criterion. The firm's goal is to maximize the expected revenue extracted during a fixed time horizon. This problem also arises in the growing area of choice-based, network revenue management, where computational speed is a critical factor for the practical viability of a solution approach. This so-called latent-class, logit assortment problem is known to be NP-Hard. In this paper, we analyze unconstrained and constrained (i.e., with a limited number of products to display) versions of it, and propose a branch-and-cut algorithm that is computationally fast and leads to (nearly) optimal solutions. (C) 2012 Elsevier B.V. All rights reserved.
引用
收藏
页码:246 / 263
页数:18
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