Assortment optimization under variants of the nested logit model

Operations Research

Volumn 62, Issue 2, 2014, Pages 250-273

  Davis, James M ^a   Gallego, Guillermo ^b   Topaloglu, Huseyin ^a  

^a Cornell University   (United States)

^b Department of Industrial Engineering and Operations Research Columbia University ^*  (United States)

Author keywords

[No Author keywords available]

Indexed keywords

MATHEMATICAL MODELS; PROBLEM SOLVING; SALES;

ASSORTMENT OPTIMIZATION; CHOICE MODEL; COMPUTATIONAL EXPERIMENT; CONVEX PROGRAMS; EXPECTED REVENUE; NESTED LOGIT MODEL; POLYNOMIALLY SOLVABLE; WORST-CASE PERFORMANCE;

OPTIMIZATION;

EID: 84899555546     PISSN: 0030364X     EISSN: 15265463     Source Type: Journal    
DOI: 10.1287/opre.2014.1256     Document Type: Article

References (34)

1. Bazaraa MS, Sherali HD, Shetty CM (1993) Nonlinear Programming: Theory and Algorithms, 2nd ed. (John Wiley & Sons, Inc., New York).
2. Ben-Akiva M, Lerman S (1997) Discrete Choice Analysis: Theory and Application to Travel Demand, MIT Press Series in Transportation Studies (MIT Press, Cambridge, MA).
3. Borsch-Supan A (1990) On the compatibility of nested logit models with utility maximization. J. Econometrics 43(3):373-388.
4. Bront JJM, Mendez-Diaz I, Vulcano G (2009) A column generation algorithm for choice-based network revenue management. Oper. Res. 57(3):769-784.
5. Cachon G, Terwiesch C, Xu Y (2005) Assortment planning in the presence of consumer search. Manufacturing Service Oper. Management 7(4): 330-346.
6. Dong L, Kouvelis P, Tian Z (2009) Dynamic pricing and inventory control of substitute products. Manufacturing Service Oper. Management 11(2):317-339.
7. Farias VF, Jagabathula S, Shah D (2013) A nonparametric approach to modeling choice with limited data. Management Sci. 59(2):305-322.
8. Gallego G, Wang R (2011) Multi-product price optimization and competition under the nested attraction model. Technical report, Columbia University, New York.
9. Garey MR, Johnson DS (1979) Computers and Intractability: A Guide to the Theory of NP-Completeness (Freeman, San Francisco).
10. Hanson W, Martin K (1996) Optimizing multinomial logit profit functions. Management Sci. 42(7):992-1003.
11. Kok AG, Xu Y (2011) Optimal and competitive assortments with endogenous pricing under hierarchical consumer choice models. Management Sci. 57(9):1546-1563.
12. Kok AG, Fisher ML, Vaidyanathan R (2008) Assortment planning: Review of literature and industry practice. Retail Supply Chain Management (Kluwer Publishers, New York).
13. Lee B (1999) Calling patterns and usage of residential toll service under self selecting tariffs. J. Regulatory Econom. 16(1):45-82.
14. Li H, Huh WT (2011) Pricing multiple products with the multinomial logit and nested models: Concavity and implications. Manufacturing Service Oper. Management 13(4):549-563.
15. Luce RD (1959) Individual Choice Behavior: A Theoretical Analysis (John Wiley & Sons, New York).
16. Mahajan S, van Ryzin G (2001) Stocking retail assortments under dynamic customer substitution. Oper. Res. 49(3):334-351.
17. McFadden D (1974) Conditional logit analysis of qualitative choice behavior. Zarembka P, ed. Frontiers in Economics (Academic Press, New York), 105-142.
18. McFadden D (1980) Econometric models for probabilistic choice among products. J. Bus. 53(3):S13-29.
19. McFadden D (1981) Econometric models of probabilistic choice. Manski CF, McFadden D, eds. Structural Analysis of Discrete Data with Economic Applications (MIT Press, Cambridge, MA), 198-272.
20. Mendez-Diaz I, Bront JJM, Vulcano G, Zabala P (2010) A branch-and-cut algorithm for the latent-class logit assortment problem. Discrete Appl. Math. 36:383-390.
21. Rusmevichientong P, Topaloglu H (2012) Robust assortment optimization in revenue management under the multinomial logit choice model. Oper. Res. 60(4):865-882.
22. Rusmevichientong P, Shen Z-JM, Shmoys DB (2010) Dynamic assortment optimization with a multinomial logit choice model and capacity constraint. Oper. Res. 58(6):1666-1680.
23. Rusmevichientong P, Shmoys DB, Tong C, Topaloglu H (2014) Assortment optimization under the multinomial logit model with random choice parameters. Production Oper. Management. http://dx.doi.org/doi:10.1111/poms.12191.
24. Ruszczy'nski A (2006) Nonlinear Optimization (Princeton University Press, Princeton, NJ).
25. Song J-S, Xue Z (2007) Demand management and inventory control for substitutable products. Technical report, Duke University, Durham, NC.
26. Talluri K, van Ryzin G (2004) Revenue management under a general discrete choice model of consumer behavior. Management Sci. 50(1):15-33.
27. Tiwari P, Hasegawa H (2004) Demand for housing in Tokyo: A discrete choice analysis. Regional Stud. 38(1):27-42.
28. Train K (2003) Discrete Choice Methods with Simulation (Cambridge University Press, Cambridge, UK).
29. Train KE, Ben-Akiva M, Atherton T (1989) Patterns and self-selecting tariffs. Rev. Econom. Statist. 71(1):62-73.
30. Train KE, McFadden DL, Ben-Akiva M (1987) The demand for local telephone service: A fully discrete model of residential calling patterns and service choices. RAND J. Econom. 18(1):109-123.
31. van Ryzin G, Mahajan S (1999) On the relationship between inventory costs and variety benefits in retail assortments. Management Sci. 45(11):1496-1509.
32. Williams HCWL (1977) On the formation of travel demand models and economic evaluation measures of user benefit. Environment and Planning 9(3):285-344.
33. Williamson DP, Shmoys DB (2011) The Design of Approximation Algorithms (Cambridge University Press, New York).
34. Yates J, Mackay DF (2006) Discrete choice modeling of urban housing markets: A critical review and an application. Urban Stud. 43(3): 559-581.